§ Order read for resuming adjourned debate on Question [7 December], That the Bill be now read a Second time.
§ Question again proposed.
§ Mr. Speaker
I must announce to the House that today I propose to limit speeches to 10 minutes between 6 and 8 o'clock. I hope that those who speak after 8 o'clock will also limit their speeches to that time, so that every hon. Member who wishes to be called can be accommodated.
§ Mr. Donald Coleman (Neath)
On a point of order, Mr. Speaker. Water is a matter of enormous significance to us in Wales, yet I notice that, apparently the Secretary of State for Wales is not going to participate in this important debate, and that it is being left to the Minister of State. Is there any way in which you, Mr. Speaker, can arrange for the Secretary of State to take part in this vital debate?
§ Mr. Andrew F. Bennett (Denton and Reddish)
On a point of order, Mr. Speaker. Will you confirm that this debate is adjourned from yesterday? If you look at Hansard you will see, and since you were in the Chair you will also recall, that at 10 o'clock you had to interrupt the Parliamentary Under-Secretary of State towards the end of his speech because of the 10 o'clock rule, which allows him to return to the Dispatch Box now to complete his reply to yesterday's debate. In particular, he did not answer the questions from amenity groups about the recreational use of land or about charges. If he had wanted to answer these questions he would have the right to complete his speech at the Dispatch Box this afternoon.
§ Mr. Speaker
Technically, that is correct, but I can only call Members who seek to catch the eye of the Chair.
§ The Minister of State, Welsh Office (Mr. Wyn Roberts)
I want to devote a proportion of this opening speech in this second day of the debate to the changes that the Bill will bring about in Wales. Many English Members will be interested because they obtain their supplies from Wales. As the House will know, water is a sensitive issue in Wales, partly because we can supply it to others cheaper than we can buy it ourselves. Our geography, which provides for an abundance of rain, requires that our water charges, related as they must be to distribution costs, are relatively high. But I shall return to charges later.
In general, the provisons of the Bill apply equally to both Wales and England. The Bill will create in Wales private-sector undertakers to provide clean, wholesome water and take away dirty water through the sewerage system. I am confident that the privatisation of the utility functions of the water authorities in Wales will allow the provision of a more efficient operation to the benefit of Welsh consumers.
§ Mr. Dafydd Wigley (Caernarfon)
The Minister suggested that he thought that the Bill would be helpful to Welsh consumers. Given that the average equated water 460 rate for 1988–89 in Wales is 108p compared with 50.95p in Severn-Trent—over twice the level—will he say whether that gap will close when the Bill comes into effect?
§ Mr. Roberts
As I hope to show, privatisation of the utility function of the authority will make for greater efficiency and will contribute towards the reduction of prices, but there are other factors to be taken into account.
The Bill will also establish the National Rivers Authority to take over the other functions of the water authorities.
This split of the present water authorities, a split of interests that were often in competition, will not, as has been suggested by some, break up the system of integrated river management. It will sensibly divide the functional provision of water and sewerage services from the present regulatory and promotional roles. It will lead to a better system of benefit to us all.
Our proposals for a National Rivers Authority have been widely welcomed by all the major conservation groups and reflect the Government's commitment to the protection of the water environment. The NRA's functions will include water pollution control, water resource management, flood defence, fisheries and recreation—all matters of considerable importance in Wales.
The NRA will be an England and Wales body, but its real presence and the impact of its policies will be in the regions. The NRA regions will be based on the boundaries of the present water authorities, and there will be one region covering the present area of the Welsh water authority.
The main NRA committee in each region will be the regional rivers advisory committee which will encompass all the main interest groups and be able to make representation to the authority about the way in which it carries out its functions in its region. The authority will appoint the members of that committee.
The NRA will discharge its land drainage functions through regional flood defence committees, successors to the current regional land drainage committees. These will be based on the same areas as the existing RLDCs and will be constituted on similar lines.
I can assure the House that the provisions of the Bi11 do not fundamentally alter the present position with regard to land drainage and flood protection. The chairman and a number of other members of the regional flood defence committee will be appointed by my right hon. Friend the Secretary of State for Wales.
The National Rivers Authority will also be advised in its regions by regional fisheries advisory committees, appointed by the NRA, which will also determine how many local advisory committees it requires. In doing that, it will take into account the views of the interested organisations. Those concerned with fisheries will also have a voice on the regional rivers advisory committee, so those interested in fisheries will be able to pursue local needs and problems as well as considering the broader, more general issues.
The responses to the consultation paper on the National Rivers Authority published in July 1987 showed that few were in favour of a separate NRA for Wales. Respondents were more concerned to ensure that they would receive a good quality service.
My right hon. Friend the Secretary of State for Wales will have a considerable interest in NRA functions in 461 Wales. To help him, the Secretary of State for Wales will appoint a special NRA committee to advise him on Welsh issues, related to NRA policies and activities. The special committee will advise on matters related to the whole of Wales, including that part currently served by the Severn-Trent water authority and will include the chairmen of the various regional committees for the area currently served by the Welsh water authority. This special committee will be chaired by the Secretary of State for Wales' appointee to the NRA. We consider that the chairman of Severn-Trent's regional river advisory committee should also be a member, and there is a case for one or two more independent members.
§ Mr. Dafydd Elis Thomas (Meirionnydd Nant Conwy)
The Minister is aware of my keen interest in reducing the number of quangos in Wales to reduce public expenditure. Will he explain the proposed structure and where it is set out in the Bill because so far I have failed to find it? Perhaps it is in an appendix. Will he confirm that the NRA will be accountable to the Secretary of State for the Environment and that the structure in Wales is that the NRA advisory committee will advise both the Secretary of State for Wales and the NRA? In other words, the NRA is an English body accountable to the Secretary of State for the Environment and another Welsh quango will advise the Secretary of State about his response to the NRA.
§ Mr. Roberts
I thought that I had made the position absolutely clear. The Secretary of State for Wales will appoint a member of the National Rivers Authority. The Secretary of State will have a special committee that will be chaired by that appointed member of the NRA. On that committee, which will be non-statutory, there will be the people that I have mentioned who are themselves chairmen of statutory bodies. As I said, there will be a case for other independent members. We shall be looking for an efficient and effective NRA that will secure in Wales improvements in environmental water matters.
The new water plc that succeeds Welsh Water will be responsible for the supply of water and the removal of effluent. The Bill will also provide new powers allowing the Secretary of State to set out clearly in regulation the quality of the water that the new undertakers will be obliged to provide. There is no doubt that if the trends that faced the Government in 1979 had continued, the proposals in the Bill to establish private sector water and sewerage undertakers would not now be before the House. That the proposals are before us is the result of Government policies and of the work of the various managements of the water authorities who have successfully implemented Government policies. Welsh Water's management has played its part.
As Welsh Members said yesterday, much time has been spent in the House discussing the many aspects of the performance of the Welsh water authority, but the authority's performance has stood up well to scrutiny, and I pay tribute to what it has achieved. When the Bill is enacted, the successor company to the Welsh water authority must, of course, concentrate on the core businesses of water and sewerage, but it will also be able to develop other business activities with less restraint than in the past.
§ Mr. Andrew F. Bennett (Denton and Reddish)
The Minister has spoken about the existing water authority. Could he tell us a little about the conflicting demands for use of the rivers by canoeists and fly fishermen? To what extent will those conflicts be resolved by charges? He will be aware that on the Conway and on other rivers in north Wales there has been almost open warfare between canoeists and fly fishermen over who should use them. How will these changes improve that argument?
§ Mr. Roberts
I look forward to debating that matter in Committee because it will make for an excellent Committee debate. I am coming to various aspects of the points that the hon. Gentleman has raised in this debate and that he raised yesterday when my hon. Friend the Minister responsible for sport replied to him. However, we can go over the ground again if he wishes.
We recognise that the new public limited companies will be natural monopolies. Safeguards for the customer are therefore necessary and the Bill provides for regulatory arrangements. Some conditions, including the general duties to provide water and sewerage services and compliance with the quality standard set for water supplies, will be enforced by the Secretary of State. But additionally, the Bill establishes the Director General of Water Services who will be independent of Ministers and accountable to Parliament. His role will be to protect consumers by monitoring the performance of the water companies against the conditions of their licence, to set charges limits and to ensure that the water companies carry out their functions efficiently and effectively. Customers will be directly represented in the regulatory system by a network of regional customer service committees reporting direct to the director general.
§ Mrs. Ann Clwyd (Cynon Valley)
What assurances can the Minister give customers that disconnections in Wales will not increase under the privatised authority? He will know that under the present arrangements the Welsh water authority is top of the league for disconnections to customers. What assurance can he give that things will not get worse under a privatised industry?
§ Mr. Roberts
The hon. Lady will have to wait for the terms and conditions of the licence that will be given to the water plc. At present, Welsh Water appoints seven local consumer advisory committees, one to match each of its original operating divisions. This structure differs from that operating in the areas of the nine English regional water authorities.
Under the Bill the customer service committees will be appointed by the director general and will be totally independent of the undertakers that they will monitor. There will be two such committees operating in Wales, one covering the Severn-Trent area and the other covering the Welsh water authority area.
Schedule 4 of the Bill allows customer service committees, with the approval of the director general, to establish local and other sub-committees. In a statement to the House on 5 February 1986, the then Secretary of State for Wales, my noble Friend Lord Crickhowell, gave a commitment that the customer service committee operation within the area of the Welsh water authority could be assisted by divisional committees. We hold to that view, although I should add that the number of sub-committees required will need to take into account the structure of Welsh Water's successor company and the 463 changed responsibilities of the committees in Wales because of the establishment of the National Rivers Authority.
The membership of the committee in Welsh Water's area will be the same as its English counterparts, with members drawn from broadly the same interest groups represented on the present local consumer advisory committees. The customer service committees will represent to the director general the views of the customers on the operations of the water undertakers. The hon. Member for Cynon Valley (Mrs. Clwyd) will be interested to know that they will have a statutory duty under clause 26 to investigate complaints and to consult companies about matters that seem to the committee to affect the interests of consumers. They have a vital role in the regulatory system.
I want to touch upon three issues of particular sensitivity in Wales—land, public access and charges.
The privatised water and sewerage undertakers must have the freedom to dispose of land surplus to their operational requirements. This is the present practice. The Welsh water authority has the right to dispose of surplus land, and the Government have consistently encouraged the water authorities to dispose of land surplus to their requirements.
§ Mr. Roberts
I can assure the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) that such disposals are currently taking place. No company, whether private or public, will wish to dispose of land that it requires for operational purposes. By getting rid of land that is required—for instance, as a gathering ground for water—might raise the danger of an adverse effect upon the quality of supply, and water undertakers can be penalised if water is not up to the specified quality.
Much of the land held by Welsh Water is in national parks or in environmentally sensitive areas. The value of any such land to a prospective purchaser depends on the receipt of planning permission for development. I find it difficult to visualise a situation in which planning permission would be more easily obtained than it is now, especially in our national parks or in other areas of outstanding natural beauty. Such sites will continue to be subject to stringent planning controls, and land in other areas will remain subject to local planning controls.
§ Dr. Thomas
The Minister knows that I represent more national parks than any other hon. Member. I am therefore deeply concerned about the implications of what he has said. Will he give an assurance to me and to the hon. Member for Brecon and Radnor (Mr. Livsey) who represents the Brecon Beacons national park that no land will be disposed of in the national parks by the successor utility to the Welsh water authority or any other authority before consulting the national parks authority? Is it the Government's intention, in privatising water utilities, to privatise land holdings in national parks which are environmentally sensitive?
§ Mr. Roberts
I cannot give the hon. Gentleman the assurance for which he asks because, as I have said the existing authorities have the right to dispose of land and the successor companies will have a similar right. 464 Obviously, we are seeking to assess the value of the land, and that will have to be taken into account in fixing the price for shares on flotation.
The majority of us who are interested in the protection of the environment have nothing whatsoever to fear from the proposals in the Bill and should welcome the additional safeguards provided. That has not of course stopped the numerous scare stories that have come to the surface in recent weeks. Water authorities, once privatised, it is said, will not care for the environment. They will be so concerned to make profits that everything else will go by the board. They will charge exorbitant prices for facilities and even, according to the Daily Post of 25 November, charge for admission to national parks. Anyone who has studied the provisions of the Bill will realise that that is certainly not intended and I am surprised—indeed appalled—that such stories should appear.
As my hon. Friend the Minister responsible for sport pointed out in his closing speech last night, clause 7 of the Bill places duties on both the National Rivers Authority and the privatised undertakers in relation to conservation of the environment, the development of water and land for recreational purposes and the preservation of public rights of way and rights of access.
Moreover, clause 9 provides for a code of practice which the Secretary of State may produce to give practical guidance to undertakers and promote best practice. The code, a draft of which will be available in the new year, will be taken into account. by the Secretary of State in exercising his powers under the Bill and in assessing the performance of any particular water or sewerage undertaker.
The Bill allows for charges to be made for recreational facilities, but facilities are not free now. At present, costs not recouped from specific receipts are paid for by all customers through the environmental services charge, which is quite significant in Wales. That will no longer be available, and it is only right and proper that those who use facilities should pay for them. But the charges must reflect the standard of the facilities offered and the availability of alternatives. Another constraint is the simple practicality of collecting and enforcing charges. The water undertakers will have a public image to project and undoubtedly, as other private companies have sought to do, will seek to show the community that they are worthy and effective custodians of the water environment.
§ Mr. Andrew F. Bennett
I well understand that if the water authorities do something to improve the opportunity for people to enjoy facilities there is an argument for making charges. Will the Minister guarantee that there will be no charge when canoeists use a river and the water authority does nothing to facilitate that activity? Will he guarantee that there will be no charges on people who walk over land which is not a public right of way, but traditionally the water authorities have allowed people to walk over it, if nothing is done to improve the facilities?
§ Mr. Roberts
In his earlier intervention, the hon. Gentleman posed the problem with which I am only too familiar of the conflict between canoeists and anglers. As I have said, we would be well advised to discuss that in Committee rather than on the Floor of the House. With regard to his other point, as he knows, I have referred specifically to where there are rights of way, where there are facilities that have cost money and have to be charged 465 for. We have covered that point. I am sure that if one pursued it in detail, as I know the hon. Gentleman is so capable of doing, we shall have to examine very carefully specific areas such as those he mentioned.
The level of water charges in Wales has always been a contentious subject. I do not intend to go into the reasons for that today, except to say that charges in Wales are set, as they are throughout England and Wales, at the lowest possible level to maintain and improve services to the customer. We are all concerned with protecting the environment and that cannot be achieved without cost.
§ Mr. Allan Roberts (Bootle)
Does the Minister accept that the water services charge is a precept upon the rates of local authorities by the water authority at the moment, and that the change that takes place under the Bill is that the National Rivers Authority will be responsible and will use taxpayers' money instead of ratepayers' money? The Government believe in cutting public expenditure and not contributing the money that we expect. That is why we think that they will be caught. The White Paper and the Bill state that charges will be increased to maximise income.
§ Mr. Roberts
I do not think that the hon. Gentleman has got it quite right. He knows how the NRA will be financed. It will receive Exchequer support. However, whatever service is provided must be paid for somehow. Currently, in some places many services are covered by the environmental services charge.
If we are to have bathing waters that comply with European Commission requirements, if we are to meet demand for wholesome water at constant and reasonable pressure, if we are to be free from polluted waterways and foul flooding to a greater degree than in the past, those higher standards need to be paid for, regardless of whether the undertakers are in the private or the public sector. Because of the discipline of the private sector and the market, privatising the industry may well mean that those necessary charges turn out to be less than they would have been otherwise.
There is considerable interest in Wales in this measure and we intend that it should benefit the people of Wales in all the ways possible under its provisions. They can become share owners and have a real stake in the new company. They can own Welsh water in a way that they have never owned it before. There are all sorts of ways in which the Welsh people can participate actively in the new arrangements and ensure that this measure is of benefit to them and to Wales as a whole.
§ Mr. Barry Jones (Alyn and Deeside)
The Minister of State is right in saying that water is a sensitive issue in Wales, so why does the Secretary of State not address the House on what is arguably the most important measure to affect Wales this year? Why is the Secretary of State absent? Why has he left the Chamber?
The Welsh water authority has 1 million customers, 3 million consumers and 4,600 employees, and the overwhelming majority of them are against privatisation. The Minister of State proposes a course of action that does not have the backing of the people in Wales. Nor has he been persuasive today.
466 The hon. Member for Brecon and Radnor (Mr. Livsey) yesterday promised vehement opposition. He said that before the industry had been put into the public domain there had been horrendous problems related to health. I agree with him. That memory remains in Wales, and that is why there is no body of support and why the measure is totally friendless in Wales, as there is a generation still active in public life in the Principality which suffered great privation between the wars. That generation tells those who will listen about the chaos and inaction, and about dysentery and other diseases, that were prevalent when standards were low.
Yesterday, my hon. Friend the Member for Gower (Mr. Wardell) denounced Her Majesty's Government for their hypocritical acts in pulling the plug on the water industry. My hon. Friend's chief point was that, by imposing artificially low ceilings on the Welsh water authority's capital investment and borrowings, the Government have created a backlog of remedial works that will cost enormous amounts of money to clear. My hon. Friend should know—he chairs our Select Committee. Opposition Members do not believe that that money will be available in the right amounts on the right terms.
Last night the hon. Member for Glasgow, Govan (Mr. Sillars)—a Scot—said that the nation's resources were to be stolen. There is certainly an echo of that assertion throughout Wales. Welsh public opinion is deeply hostile to the Bill.
In a passionate speech in the same debate last night, my hon. Friend the Member for Wakefield (Mr. Hinchliffe) asked about the consequence of metering on the poorest families and the largest families. They are often the same. They must economise on water. I emphasise my agreement with the remarks of my hon. Friend when he said that there is deprivation in Wales and that the Welsh Office must face the issue when the Bill is considered in Committee.
Again, from the Opposition Front Bench, my hon. Friend the Member for Copeland (Dr. Cunningham) dealt with the crux of the Bill which is that, faced with the priority of making profits, it is extremely unlikely that the vigorous policy of environmental improvement that is urgently needed will appeal to privately owned water companies. I can truthfully report to the House that that is the fear in Wales.
When he wound up the debate, my hon. Friend the Member for Bootle (Mr. Roberts) touched on another crucial feature. He said that there were contradictions in the Government's stance. They must persuade the City that, first, there are no destabilising uncertainties about costs attached to environmental controls, and, secondly, that there are genuine additional environmental safeguards, backed by cash. So far in the debate, we have not been persuaded. My hon. Friend the Member for Bootle was shrewd to make that point. We in Wales are sceptical of the Government's supposed good intentions, and we are cynical because of the Government's record so far.
Last night, too, my hon. Friend the Member for Burnley (Mr. Pike) said that the Government had skilfully and ruthlessly removed from the water industry almost everybody who might have opposed its privatisation. Will the National Rivers Authority impose centralisation to such an extent that Wales will lose? Will the Welsh authority plc be able to attract the necessary capital to 467 tackle the huge challenge that remains in polluted areas? That was the gravamen of the complaint by the hon. Member for Caernarfon (Mr. Wigley).
§ Mr. Win Griffiths (Bridgend)
On the question of paying to deal with pollution, the Welsh water authority has a programme for cleaning up beaches which is due to be completed in about 15 years. is it not a good idea to warn potential purchasers of water authority shares that action could be taken against the Government to bring beaches into line in a much shorter period than the 15 years that are currently planned? The Commission is recorded as being prepared to consider that proposal.
§ Mr. Jones
My hon. Friend has made an apposite point. The warning is serious. Swansea bay may be the exemplar of my hon. Friend's accusation.
Last night my hon. Friend the Member for Denton and Reddish (Mr. Bennett) made a balanced contribution to the debate. He sensitively referred to the drowned valleys and destroyed communities of yesteryear. Those communities were damaged or obliterated so that the big cities of England could benefit.
The Bill increases resentment. The people of Wales do not want the Bill, but the Prime Minister and her ideologues want to impose it upon us. Yesteryear saw insensitivity for the benefit of English cities. The Government's actions tomorrow will be insensitive, and they will be for profit. That is an insensitive approach, and it is one of the main reasons why there is so much resentment in the Principality.
The time has come when we must stop taking our water resources for granted. Water is too scarce; it costs too much to collect, transport and distribute any longer to be wasted, polluted or fenced off from recreational use. The Government's proposals are, therefore, radical and far-reaching. They are designed to create the conditions and to provide the necessary modern machinery for the cleaning up of our rivers, the improvement of our sewerage and sewage disposal arrangements, and the safeguarding of the nation's water supplies for the remainder of this century."—[Official Report, 2 December 1971; Vol. 827, c. 679.]Those are not my words; they were the words of the Secretary of State for Wales. They were uttered on 2 December 1971, when he was Secretary of State for the Environment, when he made social and economic history by proudly introducing in a statement the forerunner of the far-reaching 1972 water industry legislation.
The right hon. Gentleman is the Secretary of State for Wales, but he is the man who begat the last great water reorganisation. He was then a young Heathite Cabinet Minister, pledged to interventionism. As a Cabinet Minister, he saw the right hon. Member for Old Bexley and Sidcup (Mr. Heath) sack the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), the present Secretary of State for the Environment, who was then an Under-Secretary of State for Trade and Industry. [Interruption.] Yes, it happened. The present Secretary of State for the Environment lost office because, even then, he was a market forces man.
§ The Secretay of State for the Environment (Mr. Nicholas Ridley)
Of all people, as a member of the Labour party, the hon. Gentleman must know the difference between resignation and being sacked.
§ Mr. Jones
I am grateful to the right hon. Gentleman for that gracious intervention. I remember that after he left office he behaved true to form on the Committee 468 considering what became the Counter-Inflation (Temporary Provisions) Act 1972 and demonstrated that even then he was a market forces man.
The logic of the 1971 statement by the now Secretary of State for Wales was that of social ownership of a vital public utility. By his statement, the right hon. Gentleman established quangos. He ackowledged the importance of local authorities and gave them substantial water authority places. How times change in British politics. The sacked then Under-Secretary of State for Trade and Industry, who left office gracefully—he was not sacked, he said—now dictates to the Secretary of State for Wales. The sacked then Under-Secretary of State, who left office gracefully, is today's Cabinet market forces apologist.
Today is a sad day for civil servants in Wales. They do not want the Bill. They know its flaws, they know its risks and, doubtless, they have advised against it. I do not think that they had to argue long with the Secretary of State for Wales.
§ Mr. Wyn Roberts
The hon. Gentleman has no basis whatsoever for saying that the loyal civil servants in the Welsh Office, which has been loyal to successive Governments, are against the Bill. If he has a shred of evidence, will he please produce it?
§ Mr. Jones
That intervention would have been so much more effective if the Secretary of State for Wales had been able to make it. Where is the Secretary of State for Wales? Nothing that the Minister of State has said today has any ring of conviction or of truth.
When the right hon. Member for Cirencester and Tewkesbury introduced this matter in the Cabinet, I suspect that the Secretary of State for Wales went pale before he went red with rage. At that Cabinet meeting, and certainly at that Cabinet Committee meeting, I do not think that the Secretary of State for Wales shaded his advice. I believe that he called for a rethink. What he probably said was on these lines: "Leave well alone. Privatising the water industry is a step in the dark. We have better things to do, and with better political returns."
§ Mr. Jones
I shall not give way at the moment. I am grateful for the presence of the Secretary of State for the Environment, if we cannot have the Secretary of State for Wales. Where is the Secretary of State for Wales? If the right hon. Gentleman will tell me where he is, I might later allow him to answer some of the questions that I intend to put.
§ Mr. Jones
If the right hon. Gentleman can contain himself and listen to me, I was saying that the Secretary of State for Wales was probably saying: "We have better things to do, and with better political returns. Privatising the Welsh water authority will be seen as an affront by most Welsh people. Lately, the Principality has gone through a very rough patch. Nationalism in Wales has little support, but all parts of Wales have a high degree of national 469 consciousness. They are already cynical about the advantages of those in the south-east and about what is called the City and speculation."
The right hon. Gentleman probably went on: "This measure will stir up policial trouble for us. The Welsh like their water authority even though they criticise it. I created the Welsh water authority, so I should know, should I not? The party in Wales has some difficult seats to defend. Frankly, the privatisation of water is political suicide in Wales."
I suspect that the right hon. Gentleman went on in this way: "Do you not think it would also be disastrous in the regions, for example, in the north-west and in Yorkshire? Why make such an ideological fetish of privatisation, Nick?" However, the Prime Minister said, summing up: "Peter, we are not going to be moved. Nicholas and I are not for turning." No one else in the Cabinet supported the Secretary of State for Wales.
Before turning to the next business, the Prime Minister probably then said: "Peter, if you and Ted created the water authorities, Nick and I will be bound to sell them off to the highest bidder."
§ Mr. Ridley
I am grateful to the hon. Gentleman for giving way at the end of his description of the Cabinet meeting at which the Secretary of State for the Environment is alleged to have presented his proposals for privatising the water industry. At the time, the Secretary of State was my right hon. Friend the Member for Mole Valley (Mr. Baker) and the Secretary of State for Wales was my noble friend Lord Crickhowell. The hon. Gentleman has cast the characters two years out of date, which shows his extraordinary historical ignorance.
§ Mr. Ron Davies (Caerphilly)
The Secretary of State referred to the previous Secretary of State for Wales. Does my hon. Friend feel it somewhat amiss that that individual, who was then a member of the Cabinet that gave birth to these proposals, is now receiving £40,000 a year as the chairman-designate of the National Rivers Authority? Does my hon. Friend agree that if that happened in local government the individuals involved would now be in prison?
§ Mr. Jones
My hon. Friend signed the appropriate early-day motion at the time.
There was unease yesterday among Conservative Members about the effectiveness of the National Rivers Authority, the proposed watchdog for pollution. To put it bluntly, the hon. Member for Devizes (Sir C. Morrison), always his own man, asked:What guarantee is there that the Treasury will be less mean than usual?There is no guarantee. The hon. Gentleman went on:Without that … the NRA may not be able to live up to its responsibilities, especially in monitoring the effect of pollution along the 25,000 miles of rivers, in coastal waters, on ground water and in estuaries".—[Official Report, 7 December 1988; Vol. 143, c. 362-63.]470 I should warn fishermen in the Principality to watch the situation carefully.
The Minister of State referred to the National Rivers Authority, but I must tell him that both the Wales TUC and the Welsh Consumer Council sought a Wales National Rivers Authority which would have been accountable to our own Secretary of State. The regional aspect of the hon. Gentleman's speech was not at all persuasive.
§ Mr. Wyn Roberts
Of the 51 responses to our consultation document, only nine were in favour of a National Rivers Authority for Wales.
§ Mr. Wigley
The hon. Member for Alyn and Deeside (Mr. Jones) has raised an important matter that has not been clarified by the Government, either today or yesterday. I am referring to the responsibility for river water in Wales. Will it remain a Welsh Office function if the National Rivers Authority is answerable to the Department of the Environment? There will be an almighty tangle in terms of answerability if the Bill remains as it is.
§ Mr. Jones
The prospects for complications are considerable and the hon. Gentleman's point is well made.
When will the Minister of State make a statement on the impact of the changeover on Welsh industry? Industrialists in Wales will be under pressure on prices from day one. Privatisation could mean that the control of water supplies and sewerage services to Welsh customers will, for the first time, pass to non-Welsh organisations, chiefly because the shares in the new water company are likely to be held by finance houses in London or abroad. Welsh public opinion will not accept that.
Last year the Welsh water authority was top of the league for cutting off water supplies to defaulting families. Between 1984–87 and 1987–88, the cut-off rate escalated. That came through with startling clarity in an answer to a question tabled by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd). Our fear is that the new company, driven by profit reasons, will drive up the cut-off rate dramatically. I remind the House that Wales manages to top the league tables of poverty, ill health, pollution and dereliction, and that there is a public health consequence in respect of cut-offs, as there is in respect of the imposition, should it occur, of metering.
I should like to set out the size of the task ahead of us if the measure goes forward. There are 10 Welsh lakes and 90 miles of Welsh rivers without fish. The Welsh water authority has more coastal sewage discharges than any English water authority region. The majority of the authority's discharges to tidal waters are short outfalls discharging crude, untreated sewage. Some 40 per cent. of these outfalls are more than 40 years old and a few date from the 19th century. The Welsh water authority has a greater number of small, older outfalls than any other water authority, and many of them were designed with little attention to environmental effects. In Wales, there are also hundreds of private sewage discharges, but these now come under the control of the water authority.
§ Mr. Tim Devlin (Stockton, South)
I have not been in Wales for some months, but if what the hon. Gentleman 471 says is true, does it not make sense to separate the function of licensing pollution discharges and being the water authority? Is that not what is achieved by the Bill?
§ Mr. Jones
The point that I am making, by giving highly relevant and impartial information, is that we do not believe that the great task ahead can be tackled by the plans which the Government have so far outlined, and which the Minister adumbrated with regard to Wales.
The Wrexham and East Denbighshire water company is a statutory water company. I make my remarks about it in the knowledge that in Wales even the remotest prospect of our most basic commodity falling under foreign control will raise the nation's hackles. Does the Welsh water authority have any shares in the Wrexham water company? Does that authority harbour the objective of taking the Wrexham water company over on privatisation? Are any of the French water companies negotiating with the Wrexham water company for the possession of shares? I have established that Wrexham water company shares have increased in value since December 1987. The 4.9 per cent. consolidated ordinary voting stocks have increased in value by nearly six times this year.
These are the justifiable queries of those who have a care for this statutory company. I hope that before the end of the debate there will be some answers. I also want to know whether the Wrexham water company is vulnerable to a stock market raid during the complex flotation period.
I can illustrate my case against this privatisation by the briefest of references to a previous privatisation measure—the selling off of the bus industry. Examples may be drawn from the lamentable consequences of the Government's legislation on that. I shall attempt to illustrate the defects of this legislation by telling the House that shareholders of Crossville Wales are being asked to back a £6 million takeover of the North Wales Bus Company, a bid that will earn them a massive 300 per cent. profit on every share. This company was privatised for around £3 million, and 15 months later it will be sold off for around £6 million.
National Express, the country's biggest operator of long-distance coaches, has offered to buy Notiontreat Limited, the holding company of Crossville Wales, for £30 cash for every £1 ordinary share. The three directors, who own just over half Crossville Wales ordinary shares, are recommending that the offer be accepted. They have irrevocably undertaken to accept the offer. The chairman of the company has 48,000 shares, the commercial director and the engineering director have 26,000 shares. A sale at £30 a share would make the chairman's holdings worth, instead of £48,000, £1.3 million. The other two directors would see their holdings worth £754,000.
Let me give the House a warning about why this privatisation legislation should not be accepted. The fourth director of Notiontreat, who took no part in the board's deliberations on the offer, is not joining in the board's recommendation to accept the offer, as he is also a director and chairman of National Express, which is making the takeover offer. However, that member had more than 4,000 ordinary shares in the North Wales company and I understand that they have been transferred to close family. They will be worth about £122,000 if the annual general meeting accepts the offer.
472 Why do I refer to that effect? My reason is summed up by the divisional officer of the Transport and General Workers Union, Mr. Jim Morris, who said:I don't blame individuals, but the Government who created such a situation. This is privatisation at any price. We always said National Bus Company was being sold at a knock down price. The price being asked for individual companies was giving them away.That must be the case in the bus industry, and we fear that it may be the case with the water industry. We fear a rip off, and the Daily Post of today was doing a public service in publishing that information.
This is a land Bill. The Welsh water authority owns over 91,000 acres. When last in Wales was such a huge acreage sold off in one fell swoop? In the history of Wales, this proposal is of considerable social and economic importance. It is offensive to Welsh people that a great, successful and viable utility, a strategic resource, is to be sold. Some 9,700 acres make up the water surface. Approximately 63,000 acres surround the lakes and reservoirs. The Welsh water authority owns some of the wildest and grandest land imaginable, and the authority also owns 385 acres of important and valuable urban land. It has planning consent for nearly 10,000 acres across Wales. At the moment it is seeking planning consent for another 2,000 acres. There may be a number of other sites for which planning consent will be sought in due course. The Welsh water authority owns land worth tens of milions of pounds, and I want the Minister to tell us how much, on the basis of its land holding alone, the authority is worth.
Land with planning permission is worth a fortune. Land of scenic beauty in the late 20th century is worth a fortune. Land with scenic beauty alongside water reaches is worth even more. At the moment the authority is a sensitive developer and exploiter of the land, but the Bill opens up the possibility of speculation by people and forces with fewer scruples. There is even the prospect of windfall profits for the new owners. I remind the Minister that the Brecon Beacons have breathtaking beauty. Snowdonian scenery is awesome, and the Welsh marches are charming walking countryside. There is a welcome in our green valleys. There is access to the hillsides as well as a welcome, and we are telling the House, "Do not change a successful formula." I think that the people of Wales should know that the Labour party will return the water companies to social ownership.
There is widespread dismay in Wales that the Government have arrogantly proposed this measure without a shread of support from our people. Welsh consumers expect a surge in the price of water. We are contemptuous of a Government who impose the measure on Wales but not on Scotland. We support the environmentalists, who fear commercial pressures on the landscape. The Bill sets up a monopoly that will have no competition. The Bill appears to set no specific water quality standards. It hands over some of the most important assets in Wales to private enterprise, and probably at a rip-off price.
Nobody believes that there will be sufficient capital investment to tackle outstanding pollution problems. Even at this late stage, I ask the Government to omit Wales from the legislation. For the people of Wales, this legislation is retrograde. Everybody expects the new company to put profit before investment and exploitation before quality. No local authority, no church, and no voluntary 473 organisation in Wales supports the Bill. It is completely friendless. The Bill is a 343-page long political suicide note. It will cost the Government dear in Wales. We know that it will lose them national political power. We have no hesitation in urging all hon. Members to vote the Bill down tonight.
§ Mr. Andrew F. Bennett
On a point of order, Mr. Deputy Speaker. I believe that you have a responsibility to safeguard the interests of individual hon. Members. As no Conservative Member has risen to provide an alibi for the Secretary of State for Wales, I wonder whether you have been told why he is not here to defend the contrast between his 1971 position and his position today.
§ Mr. Chris Butler (Warrington, South)
Most of my remarks are not concerned with Welsh Water at all, but I listened carefully to the speech by the hon. Member for Alyn and Deeside (Mr. Jones) and I found it interesting. He called for a Welsh National Rivers Authority, which would cover the whole of Wales. I remember the passage of the Wales Bill—of which the hon. Gentleman was an enthusiastic supporter—through the House. It proposed that the Welsh assembly should deal only with the area covered by the Welsh water authority, not with the area covered by the Severn-Trent water authority. Therefore, the hon. Gentleman appears to have changed his mind on the matter of Welsh Water.
He also advanced a new concept, which was that the Welsh water authority was a popular establishment in Wales. That is certainly news to me. I understood his point about the history of the planning of water and that the establishment of a water supply was tainted with incidences of disease, because I remember my father telling me when I was young of his experience as a GP in the south Wales valleys. However, the quality of water depends not so much on its ownership, but on the statutory framework within which the relevant authorities are run.
In 1886 there was a cholera outbreak associated with a bakery that was noted for its especially fine quality bread. Sanitary inspectors were called in. They found that there was a connection between the local privies and water reservoirs that were used in the bakery. They closed off the connection and the cholera outbreak subsided. However, this was followed by public outrage because the quality of the bread deteriorated.
§ Mr. Butler
My hon. Friend the Under-Secretary of State for the Environment told me in a written answer:All public supplies of drinking water in the United Kingdom are safe to drink."—[Official Report, 26 October 1988; Vol. 139, c. 228.]On the very next day, in The Daily Telegraph, it was reported that Thames Water admitted that its water contains five times the legally permitted level of polycyclic aromatic hydrocarbons, which are well known carcinogens derived from the coal tar linings of water pipes. Thames Water said that it would cost £1 billion to put right, and a sombre official admitted, "Someone's got to pay for this".
474 My hon. Friend the Under-Secretary of State for the Environment in a reply on 3 November said that there was unlikely to beany significant health risk from drinking water which occasionally exceeds the standards".But how significant is significant? After all, the levels are five times those permitted by European Community law and presumably those standards are devised on the advice of experts. How occasionally is occasionally? After all, the coal tar is in the pipes all the time. The North West water authority is engaging in urgent research to find out whether its water, too, is contaminated with PAHs.
I question whether all public supplies of water are safe to drink. We know that 85 water supplies in Scotland exceed the European Community lead limit, that in 61 out of 168 samples the carcinogen trichloroethylene was found at levels above the World Health Organisation's permitted limits, and 4 million people in this country drink water contaminated with nitrates at above the limit permitted by the European Community maximum of 50 mg per litre.
I am especially worried about the quality of water in the London area. I try not to drink London tap water. I find it rather disgusting. I drink mineral water and I believe that my habit is shared by many others because sales of mineral water keep rising dramatically. The Select Committee on the Environment took evidence that 30 per cent. of people have water which is extracted from lowland rivers. We use our rivers as sewers, so those poor people are drinking water which is 10 per cent. sewage. The Thames, too, is used as a sewer. We know of sewage works which are so old and decrepit that they disgorge their contents directly into the Thames.
There are also doubts about the quality of the ground water in the Thames valley area, which is used for gravel and sandpit digging. Once those pits are dug, they are filled with domestic and building refuse. The end result is that the dilute and disperse policy in this very permeable area is a recipe for pollution of our ground water with leachate. Increased extraction of water from the upper Thames area will only add to the strong pressures of ground water running through landfill areas. There were no controls on leachate dumping prior to 1974 and cowboys were rife in that area. There is still inadequate control of building rubble, which produces methane and also contains nasties such as lead and asbestos, which themselves can leach out. We know of landfill areas that are leaching direct into water courses that lead to the Thames. The Halcrow report, published last week, said:Landfill sites continue to be a major potential threat to ground water quality.
In my constituency there is a 390 acre landfill site just opened by Cheshire county council. It will have a clay bund which is meant to contain the many millions of gallons of leachate that it will produce. However, I question the sense of Cheshire county council in placing that site where it has, because it is directly between the two major water courses of the north-west—the Mersey and the Manchester ship canal. Worse than that, Cheshire county council has placed it directly over a major aquafer which feeds a large part of the north-west. I believe that it feeds part of Wales, too.
The North West water authority sent me a letter saying:It is recognised that landfill sites always produce leachate and that even engineered sites can and do leak … It is considered better to risk the resources in one area for a long period rather than have several short-term risks scattered about.475 That is hard cheese for Warrington, which must shoulder the risk for many other areas.
It is against that general background that I welcome the establishment of the National Rivers Authority. I welcome the appointment of my old boss, Lord Crickhowell. Those who know Nick well will realise that bureaucratic incompetence and insensitivity will wither before him. He has an immense task. The river quality survey on which the Select Committee on the Environment reported said that the quality of rivers over the past five years had deteriorated. The DOE expects no change in that before 1990.
In the North-West water authority, area between 1980 and 1985, 266 km of river length deteriorated in quality. The Mersey remains probably the most polluted estuarial area in Europe. In 1986, 22 per cent. of all sewerage works were breaking their own sewage discharge consents for 95 per cent. of the time.
In many respects the Halcrow report is extremely disturbing. It says that monitoring and investigation are insufficient to enable an understanding of the distribution and behaviour of many important contaminants. It says that the level of nitrates in water is likely to rise and that the level of pesticides in water will be a serious problem.
In my view:The creation of a National Rivers Authority within a privatised water industry offers excellent opportunity for conservation, protection, monitoring and overall management of ground water resources to be co-ordinated nationally.Those are not my words but those of Sir William Halcrow, and I agree with him.
The public sector's record of protecting our water is not one of which we can be proud.
§ Mr. Deputy Speaker (Mr. Harold Walker)
Order. It being 6 o'clock, speeches between now and 8 o'clock must not exceed 10 minutes, and I very much hope that those following will not exceed 10 minutes either.
§ 6.1 pm
§ Mr. Roy Hughes (Newport, East)
So far this debate has tended to have a Welsh flavour, which is understandable because water has always been an emotive subject in Wales. As a consequence, I feel that we have a right to expect the organ grinder himself to be present rather than to leave the debate to the Minister of State, Welsh Office.
I believe that the Bill is summed up by a cartoon that I saw in one of the newspapers a few days ago. The caption posed the question, "Who owns the rain?" That cartoon illustrates the absurdity of the Government's proposals. Water is essential to life on this planet. Surely it is logical and sensible for it to be in public ownership. Nevertheless, we must face the situation and ask what the future pattern of ownership is likely to be.
We already know that three French water companies have taken substantial holdings in 28 statutory water companies. There is little doubt that their attention will now turn to the privatised water authorities. My hon. Friend the Member for Alyn and Deeside (Mr. Jones) has already said what could happen to the Wrexham water company. What will the Government do to prevent takeovers and asset-stripping? If the Government's past record is anything to go by, it will be precious little.
476 We are told that water authority land holdings throughout the country amount to 435,465 acres and that 97,000 acres of that land is in Wales. Much of it is unspoilt. It is not difficult to reach the conclusion that that land will be vulnerable to new pressures. The report published by the Council for the Protection of Rural England and the Royal Society for the Protection of Birds has said:Following privatisation, pressure for residential, commercial and recreational development is likely to increase very sharply.It would seem that with the privatisation of water, as with Royal Ordnance, the Government are selling a property portfolio, not an industry.
There is already talk of development and windfall profits. It has not escaped my notice that the Government are proposing to write off no less than £5 billion debt from water undertakings. In other words, that will be a gift to future shareholders. For years I have campaigned for the writing-off of the paper debt on the Severn bridge, the very gateway to Wales. But that campaign has been like knocking one's head against a stone wall. When I compare the Government's skinflint attitude with the generosity that is being shown to future shareholders in the water industry, it makes me cynical about their intentions.
We know that when water is privatised there will be no competition. Therefore, what will happen to prices? In recent years the Welsh people have been plagued by rocketing water charges. Now there is speculation about a further 50 per cent. increase, and Ministers have made little, if any, attempt to refute such a suggestion. Stemming from such price increases there is every likelihood of a marked upward trend in disconnections.
The Government have said that privatisation will lead to a boost in investment. But there is a big question mark about that. In any case, such arguments come a bit rich from a Government who have set such tight external financing limits for the water industry that they have had the effect of forcing up prices and curtailing urgently needed investment.
Britain has been named the dirty man of Europe. In recent months there have been revelations about sewage, pesticides and nitrates gushing out into our water. In turn the Government, not before time, have shown concern about the environment. Perhaps the threat of European prosecutions has had something to do with that. Likewise, that newfound Government concern may assist the salesmanship needed to convince the public of the merits of privatisation.
Admittedly, the Government propose the establishment of a National Rivers Authority, but it is, of course, a 6,000-strong quango. Among other things, the NRA will seek to control water pollution; yet environmental groups, whose interest in such matters goes back a long way, say that it will have neither the regulatory teeth nor the resources to do that job properly.
It is suggested that clauses 49 and 50 are vague and imprecise and that no specific water quality standards have been written in. The Government's proposals, enshrined in the Bill, are littered with contradictions. Water is a natural monopoly, and there can be no competition within any water authority area. That monopoly should provide for guaranteed profits, but massive investment is needed.
There is a public demand for improved drinking water quality; likewise, there is an urgent need to repair and replace our crumbling sewerage system. The NRA will not be able to prosecute the water companies until 1992, but 20 477 per cent. of sewage treatment works currently break the law. The Government recognise that immediate insistence on higher standards would frighten off investors.
The overriding motive of every private company is profit for the shareholder. It is argued that capital will be easier to raise on the private market, but such funding will require quick and massive return. With the Government's proposals, reluctant investors will be concerned about the costs that face the industry; and increasingly hostile consumers will be faced with ever-growing bills.
Proper investment could be provided by the taxpayer at less cost than raising capital on the private market, and control would rest directly with the Government. We are fully committed to the social ownership of the water industry, with proper provision of local services and accountability to the consumer. Water is a vital natural resource that should remain in public hands. The Bill is an abomination. It is bad for the environment and for the customer. If Wales cannot be omitted from it, the Bill should be thrown out this evening.
§ Mr. Nicholas Baker (Dorset, North)
All who speak in this debate will be heavily influenced by their local experience of the water industry, and none more so than the hon. Member for Newport, East (Mr. Hughes), who spoke mellifluously and passionately. As a mere Englishman, I feel somewhat of an intruder into a Welsh day on the Water Bill.
I appreciate the opportunity of contributing to a debate on privatisation. I support the concept of privatisation for no reasons of dogma. I believe that it will enable us to run businesses in a better way, to provide better services to the customer, and those who run the businesses will suffer less interference from politicians. I resent the suggestion that private companies are less able to perform key functions in our society than publicly-owned companies. Companies engaged in defence contracts and companies that now participate in the previous 18 areas of privatisation are good evidence of the wrongness of that view.
It is easy for us in Parliament to set out a system for regulating and controlling private companies which are engaged in areas of activity, such as the water industry, and I am glad that the Bill is setting about that task. But there is another reason why I am in favour of privatisation where it is appropriate, and it is one that I have not heard mentioned so far. I believe that companies in the private sector are better able to accommodate change than public sector undertakings. They are better and quicker at expanding and contracting, as the need for their services or as the market for their product demands. We have the history of nationalised industries. A recent example is the sad tale of British Shipbuilders. I think that the House will recognise the truth of what I am saying.
At various times all businesses need to expand and contract. If they operate in a private capacity, they are better able to do so. Our company law provides a framework that is designed to enable companies to grow and contract. Large national undertakings, by their very structures, are less able to do so. Therefore, I welcome this further measure of privatisation. The advantages enjoyed by private companies will apply in this instance. In addition, they have the advantage of being able to raise 478 capital on the market. I am less terrified by the prospect of publicly-owned water companies than some Labour Members. That is because the water to my house is supplied by a private company. Water in Dorset is provided by the Bournemouth District Water Company, and it does an extremely good job. It does so safely and securely in conjunction with Wessex Water.
I have some worries about the Bill, and I shall present them to my right hon. and hon. Friends on the Treasury Bench. First, I hope that we shall not over-regulate water companies to the extent that they are not marketable. It would be extremely dangerous to the supply of good quality water if the shareholders did not wish to invest in the companies on privatisation day.
Secondly, I am worried about price increases. Whether we pay for water services and necessary environmental controls as taxpayers or as consumers, it is necessary for charges to be increased, irrespective of whether the undertakings are privatised. The water industry has suffered from a lack of investment over many years. Indeed, that was a subject of our discussion yesterday. There is an urgent need for more investment, and that has been recognised by Labour Members. Of course, we shall have to pay for that investment. I hope that we shall not be too timid about facing the prospect of price increases. If the water industry is in private hands, it should be possible to keep necessary price increases lower than would otherwise be the case. That is another reason why I favour the privatisation of the industry.
My third worry is based on the need for a special share. Wessex Water, the authority that has overall responsibility for the water that is supplied to and around my home, has efficient management, effective controls and good assets. I suspect, however, that it and other water authorities will be especially vulnerable in the period following the flotation. There should be a special share to enable the authorities to overcome the flotation and the move into the private sector. The special share could be of infinite duration, subject to revocation by the Government if that is considered to be in the public interest.
Fourthly, I am troubled about connection charges. I live in an area with a high-growth population, and the infrastructure has not been properly planned to accommodate the growth. Water consumption is increasing at a dramatic rate. The efforts of the water authorities to accommodate the increased demand are laudable, but they have been maintained only with the greatest difficulty. Water authorities have no control over development and the pies will not have that control in future. If the infrastructure is inadequate, planning authorities should reject applications for development unless the developer is willing to finance the cost of new sewers and water supply. My right hon. and hon. Friends should maintain a connection charge to ensure that developments in areas with a high-growth population, such as the one that I represent, do not outstrip the ability of the water companies to supply proper services.
Fifthly, great fears have been expressed about the sale of assets. Mention has been made of 450,000 acres of land. I have no objection to the assets being sold. That may be in the interests of maintaining, if not improving, the quality of the job that is done by the water authorities, which are required to provide a good supply of high-quality water and other services. However, the assets must not be sold in defiance of existing planning procedures. I hear the fears expressed by the Council for 479 the Protection of Rural England and the Royal Society for the Protection of Birds. If I thought that there was any ground for believing that the normal planning procedures would somehow be avoided, I would be seriously concerned. I hope that those of us who have mentioned this issue will be given the assurance that we seek.
The Bill is an environmental measure. I welcome the creation of a National Rivers Authority. Our former colleague Sir Phillip Holland may wince at the creation of another quango, but the NRA is necessary, and it will have a very important job to do.
I end on a local point, which I believe has national applications, with which the NRA will have to deal. The demands on our rivers and water resources have increased and are increasing so greatly that in some parts—and my area is one—the ecology and environment of rivers is under threat. Water authorities have so far coped quite well. In 1969 the River Allen where I live in Barnsley—which, as everyone will know, is in the county of Dorset —had a water abstraction rate of 1.5 million gallons a day. This year, the abstraction rate is 5.5 million gallons a day. Of course, the river level has fallen. The ecology and the natural environment of the wildlife that depends on the river are being depleted and there is a threat of damage. There is a very strong need for an NRA. Its enforcement powers must be strong. If I were selected to serve on the Standing Committee—
§ Mr. John Cartwright (Woolwich)
I want to register a very strong objection about the basis on which water authority assets are to be sold off under the terms of the Bill. In 1974 local authorities saw their water service assets transferred to the new regional water authorities without receiving a penny in compensation. They received only an assurance that there would be a majority of local authority representatives on the boards of the new authorities. That assurance from a Conservative Administration was torn up in 1983 by another Conservative Administration when the so-called commercial business men's administrations took over the water authorities.
The privatisation that we are discussing will remove the last vestige of any democratic involvement in the running of those essential services. More important, it will put the Government in the very happy position of selling for billions of pounds valuable assets for which they paid absolutely nothing. Conservative Members often quite rightly object to the concept of nationalisation without compensation. I suggest that privatisation without compensation is just as unacceptable.
The case in principle for privatisation rests on the belief that market forces will generate greater efficiency by ensuring that competition makes management more sensitive to the needs of the consumer, makes it improve its service to the consumer and makes it hold down prices to retain the loyalty of its customers. That may work in many areas of industry and commerce, but, as we know, it is absolutely impossible to achieve that in terms of water and sewerage services.
The Government accept that there is no possibility of genuine competition in water and sewerage services. Therefore, they dreamed up the concept of what they call comparative competition. Yesterday the Secretary of State for the Environment said: 480the customer will be able to make comparisons between each of the companies.That produces a marvellous mental picture of a typical constituent in a high-rise block of flats in my constituency staying up late at night poring over the detailed figures trying to decide which company can offer, in the words of the Secretary of State,the best management to deliver exacting environmental and water quality standards at a lower price."—[Official Report, 7 December 1988; Vo. 143, c. 338.]Anyone who believes that that will happen is not living in the real world.
Even if my mythical constituent, gazing at the world from his 24th storey flat in his tower block, bothered to take an interest in the concept of comparative competition, what possible good could that do him? If he finds that he is being badly served by Thames Water plc, he cannot switch his water suppliers like he changes his supermarket or pub. He certainly will not have any power to influence the operation of water plcs. Under the Bill, customers will be completely captive, bound hand and foot, to a private profit-making monopoly. The Bill bestows on private companies an effective power to levy taxes. That is a distinctly medieval concept. However, since that is brought to us by the same team that gave us the poll tax, perhaps I should not be surprised by that approach.
This debate has already generated a good deal of concern about the impact of privatisation on the level of water charges. Yesterday the Secretary of State spoke about a 7.5 per cent. to 12 per cent. increase in prices in order to fund the capital improvements. On television a couple of weeks ago the Minister of State did not deny that the overall price increases would be between 50 per cent. and 90 per cent. by 1993. The Minister appears to be showing dissent. However, he is quoted to that extent in the Daily Mail which is not known for its virulent opposition to this Administration.
Other people have suggested that the price increases will be a great deal more. We know that consumers will have to meet the costs of renewing aging Victorian systems, improving water quality and providing higher environmental standards. In addition, they may well have to meet the overall costs of water meter installation. Privatisation will bring the added burdens of having to pay dividends to shareholders and to meet the cost of corporation tax. Against that background, only the Secretary of State would have the nerve to say that this is a good Bill for the consumer.
Like Opposition Members, I am concerned about the impact of rising prices on the poorest families. We know that the social security changes have brought problems because there is no longer a specific allowance for water charges which must be met from the general social security benefit. We know that some poorer consumers have difficulty paying by instalments because the existing water authorities are not flexible about accepting instalments from those who do not have bank accounts.
The most worrying spectre of rising prices is the prospect that there will be more water disconnections for non-payment. We have already experienced an increase in the number of disconnections. If the consumers advice bureau in Bath, not an area noted for being deprived, can report 35 disconnections in one week in September. we know that the situation is serious. Given the risks to health 481 and the obvious hardship, we simply cannot accept that private profit-making companies should be given unfettered power to disconnect consumers.
In the 1970s I was involved in the battle to stop gas and electricity disconnections. Major hardships were involved. However, at least there was the possibility of an alternative in terms of heating or lighting one's home if one was disconnected by a fuel board. However, there is no possible replacement if one is deprived of one's water supply.
Last night the Parliamentary Under-Secretary of State tried to assure us that a code of practice would be at least as extensive as the present one. That simply is not reassuring. The present arrangements do not stop vulnerable families from being disconnected from their water supplies. Our experience of the gas and electricity authorities shows us that codes of practice are simply not the answer. They do not prevent hardship.
Water disconnection is a massive power. It is a much more severe punishment than many meted out by the criminal courts. It simply must not be exercised by junior officials in water companies. Water debt should be pursued through the courts like other debts and disconnection should be considered only in the most rare and extreme circumstances.
I want to consider now the consumer protection machinery. The Minister of State, Welsh Office who opened the debate today tried to suggest that the Bill represented a universal and very effective system of consumer protection. I dispute that. The concept of a director general who has the twin roles of regulating an industry and trying to protect consumers has not worked well so far for British Telecom. That model does not inspire a great deal of confidence in the hearts and minds of consumers. The arrangements for a chain of consumer committees takes us back to the consumer consultative committees of the old nationalised industries. There was no great public confidence in those either.
Given the monopoly of water plcs and their tremendous powers, it is essential that consumers feel that they have a genuine body, free and independent of the industry and properly resourced, which can fight on their side—a watchdog that has the power to bite as well as to bark.
In many ways the Government's case has not been made out. They have not been able to show that, simply because they are private, the water companies will be able to offer any better service to consumers than we now enjoy. The improvements that we shall see in water quality and environmental standards are welcome, but the Government have not shown that those improvements cannot be achieved by the existing water authorities.
The Bill offers no guarantee of effective competition. It offers no guarantee of effective protection for the consumer. It involves real danger for the poorest families in our society and I and my right hon. and hon. Friends will oppose it in the Lobbies tonight.
§ Sir Giles Shaw (Pudsey)
I cannot follow the hon. Member for Woolwich (Mr. Cartwright) in his antagonism to the Bill. My hon. and learned Friend the Minister for Water and Planning will, I trust, accept that I shall be a strong supporter of it, despite some of the difficulties that 482 have been associated with it. Let me declare at the outset an indirect interest in so far as one of the companies to which I am a consultant numbers among its clients the Water Authorities Association. However, my direct interest in the industry stems from a long time ago.
Private sector involvement in water supply has probably been one of the most consistent influences whoever happened to own or direct the water authorities. Private sector involvement came very much through the municipalities and the cities; from councillors who took an active part in ensuring that their particular city had a substantial and effective water system.
That was certainly so in the West Riding of Yorkshire where, for example, the city of Bradford was run by citizens who, as elected councillors, came from the wool industry and created the massive reservoir system, scouring industry and all the other essential ingredients to form the basis of the textile industry in West Yorkshire. They were essentially private sector individuals taking a role in municipal supply.
When I joined a rural district council in West Yorkshire I remember being told by a local councillor, "Right lad, there's a lot in't drain, but remember there are no votes in it". To a certain extent he was right because the problem with the municipally-owned water industry is that since the 19th century, when the citizens who made the big decisions to invest in public water supply had all the infrastructure put in, there has been little reassessment, replacement and replenishment of the infrastructure. So it was that after the period between the wars and immediately after, the municipal owners of the public water supply found a run-down system.
Then followed the reconstruction of the water industry through statutes passed by the House, in which my right hon. Friend the Secretary of State for Wales played a major part. The current water authorities who invested in replenishment, struggling within the public sector to try to find sufficient resources within the external financing limits and Treasury restraints, have done as well as they reasonably could. If we want major changes in water and sewerage standards, better control of pollution and the environment, and better conservation, new sources of capital investment must be found and a speedy and effective solution found. The Bill provides a balanced arrangement for achieving that.
I say "balanced" because the crucial element is the setting up of public sector control—the National Rivers Authority—in such a way that the private sector can flourish to the extent required to maintain the investment level in the improvement of the assets. In my judgment, the balance is just, but only just, there. My hon. Friend has designed a system of control of the water industry through the NRA which is infinitely more rigid than it is for any industry that has so far been privatised.
My hon. Friend will share my anxiety about whether shareholders will have sufficient confidence to ensure that the industry has the asset backing that it most sorely needs. If there is to be such confidence, the operations of the NRA must be sensitive to the costs being imposed upon the industry by statute, EEC directive, the director general and the reasonable public accountability process that has been built into the NRA and the advisory committees so that the monopoly that remains does not abuse its power. The power of the NRA, a monopoly in its own right, must not abuse the private sector either which is struggling to provide a public utility for all our citizens. 483 I want to ask some direct questions. The first is in relation to the cost pass through provisions, which have been, I think, adequately dealt with in the Bill. However, I noted from what my right hon. Friend the Secretary of State said yesterday that he was anxious to demonstrate that the major cost for the revised anti-pollution programme would have to he carried by the plcs. He pointed out that the £2.4 billion was part of the pollution programme.
I am sure that neither my hon. and learned Friend the Minister nor my right hon. Friend the Secretary of State would wish the House to assume that the only significant increase in costs would come from those programmes which would be costed out at between 7.5 per cent. and 12.5 per cent. total increase in charges. That surely is not so. The cost associated with the pollution programmes, which, as is shown in Hansard, run on different time grades—1992, 1995, and the year 2000—may enter the industry's price stream at that level. But the industry, under direct Government pressure, has started to make significant improvements in its investment, all of which will have to be paid for through the cost price mechanism. We should be under no illusion that, although the pollution programme may cost £2.4 billion, significantly more millions of pounds require to be spent to maintain the existing system of supply, to improve the investment record and to cure a number of the problems already associated with a system that still shows signs of strain when under pressure.
The NRA is to be responsible for land drainage operations and coastal defence work. The House may well be aware that those two important responsibilities have to date been carried by the water authorities. In most areas, certainly those with long coastlines such as Yorkshire, the problem of coastal erosion and the massive danger of inundation or other such disasters results in an authority having to have flexible borrowing powers and usually substantial reserves. The same could well be true of land drainage. I think particularly of the problem in Anglia. It is also true in parts of Yorkshire and parts of north Lincolnshire. Will the NRA's borrowing powers be sufficient and sufficiently flexible to deal with those issues?
Schedule 1, paragraph 18, says:The Authority may, with the consent of the Secretary of State or the Minister and the approval of the Treasury, borrow temporarily in sterling by way of overdraft or otherwise from a person other than the Secretary of State or the Minister, such sums as it may require for meeting its obligations and carrying out its functions … The Authority shall not be entitled to borrow otherwise than under this paragraph.May I have an assurance from my hon. and learned Friend the Minister that that borrowing power is comparable in every way to that currently enjoyed by water authorities in discharging the same functions; for example, land drainage investment and cost, and flood protection investment and cost? I detect in schedule 1(18) the mortmain of the Treasury having rather more inflexibility than that function of the National Rivers Authority deserves.
Much has been made also of the fact that under the new regime, which we hope will be successful, companies can be more flexible in what they do, can extend their operations to a number of other activities, and can generally behave like the French. I am all in favour of that but hope that my right hon. Friend the Secretary of State and my hon. and learned Friend the Minister will take note of one further point. If that objective is to be realised, it is 484 essential that some kind of golden share arrangement is made to protect water authorities in handling the crucial five-year period between vesting and privatisation and arriving at the full potential for their powers. I hope that my hon. and learned Friend will address that aspect too, because I doubt that the new authorities will be able to behave like the French unless they are given a measure of protection from predation by French investors during the period in question.
Under the Bill, the future will be safe for private water supply, which will improve in both quality and environmental access. But I am concerned to see that the plcs will have the flexibility to develop as I trust the House wishes to see them develop, and that initially at least they will have a measure of protection to ease them on their way.
§ Mr. A.E. P. Duffy (Sheffield, Attercliffe)
I wish to ask two questions. First, what impact is privatisation likely to have on the scale of water charges in Yorkshire? Secondly, how adequate will the National Rivers Authority be in its monitoring role in Yorkshire?
There is already a strong upward thrust towards increased water charges there. As Yorkshire water authority investigates the condition of its underground assets, it finds that more work needs to be done, calling for as much as £400 million investment in the forecast period. Moreover, the authority is under increasing pressure from environmentalists and others to improve the quality of its rivers. That can be done only by spending enormous sums on improving sewage treatment works. Only half of Yorkshire water authority's current capital programme is committed to water quality improvements, with most of the remainder going on the maintenance and repair of underground assets.
To meet the Government's new requirements without prejudicing those programmes will mean increased charges to customers or increased borrowing from the Government. However, over the past four years the Government have reduced the amount that the authority may borrow to fund its capital investment programme, at precisely the time when its needs are increasing. The burden inevitably falls on customers in the form of increased charges. Twice this year I have appealed to the Minister for some relaxation of the borrowing rules, but he reminds me that Government policy is for water authorities to move away from investment based on borrowing. For 1988–89, the Government set an external financing limit on Yorkshire water authority of only £40 million, yet its accumulated deficit is more than £500 million. Last year, the servicing charges on that debt accounted for nearly half of its operating profits. It can only mean, as the chairman of Yorkshire water authority confirmed recently, that if all the money must be raised from charges,then we might have to face a 27 per cent. charges increase next year.And that comes on the threshold of privatisation.
Over the past five years, Yorkshire water authority has given investment priority to improvements in drinking water quality. Even today, about 1.25 million customers receive discoloured water through their taps. Further capital expenditure may also be affected by two incipient problems that water authorities need to monitor closely, especially in Yorkshire. The first relates to aluminium in 485 purification processes; the second to the presence of nitrates in drinking water, which hon. Members on both sides of the House have mentioned.
While a causal link has yet to be made between aluminium for purification and Alzheimer's disease, the contingency must be met in Yorkshire, one of the worst affected areas, where more than 800,000 consumers are supplied with water that may contain aluminium levels above the legal limit. The same contingency thinking—and this is where money is involved—must be applied to nitrates. Some fertilisers, such as those containing nitrites, find their way into streams and aquafers, and ultimately into domestic water supplies. Yet one quarter of south Yorkshire's drinking water comes from rivers, such as the Derwent, around York, which are fed by streams and rivulets running through agricultural land. Sheffield and Rotherham benefit from the mixing of Pennine water with Derwent supplies. Not so as one moves eastward, along the south Yorkshire valley, where high nitrate levels occur in, for example, the Doncaster area. Yorkshire water authority insists that nitrate levels are below the EEC's maximum permissible concentration—but for how long?
On 3 October 1988, The Guardian reported:Bottle-fed babies may run a greater risk from nitrates in water than the Government has publicly accepted, according to a confidential Department of Health report.The potential problems of aluminium and nitrates in water need to be borne in mind and may call for more capital resources than is currently envisaged.
Even though Yorkshire water authority's accumulated debt will be written off, it faces such a huge outlay as the result of upgrading sewers and pipes to meet new standards, investing in new equipment, and the need to provide against future water supply problems—and therefore such enormous capital levels and service charges—that a dramatic increase in Yorkshire water prices following privatisation appears unavoidable.
I turn to the role of the National Rivers Authority. Nowhere was the passage of the Control of Pollution Act 1974 received more eagerly than in south Yorkshire, as it gave rise to the expectation that its rivers would become cleaner. However I understand that by 1988 river quality worsened throughout south Yorkshire, and plans to return fish to poisoned waters have been postponed—perhaps until the next century. Yorkshire water authority chairman, Gordon Jones, admitted to me in correspondence that hundreds of kilometres of south Yorkshire's rivers are still polluted.
Sheffield city council is committed to the regeneration of its east end, yet the designated area is flanked by the rivers Don and Rother, probably the dirtiest in Britian in their local stretches. Hard though it may be to imagine today, the Rother and Don valleys once provided some of the finest countryside in all England and inspired Sir Walter Scott to write "Ivanhoe". The Rother and Don catchments were also renowned for their excellent fishing and kingfishers. I recall from my boyhood the heronries and swimming clubs that existed there.
In a letter dated 28 December 1980, I asked the Department of the Environment what estimate has been made of the effect of its spending cuts on Yorkshire water authority's plans to clean up south Yorkshire's waterways. In his reply of 29 January 1981, the then Under-Secretary 486 of State for the Environment, the hon. Member for Pudsey (Sir G. Shaw), who has just spoken, described my inquiry as unnecessarily gloomy, and claimedthe overall trend in river quality is improving.Two years later, according to a survey produced jointly by the then South Yorkshire county council and Yorkshire water authority, more than half the county's rivers were still of "poor" or "bad" quality and would cost more than £100 million to clean up. That programme was never put in hand. Instead, a 19 per cent. cut in the capital programme for 1979–80 that we bequeathed to the Government meant that 32 of south Yorkshire's 46 major schemes were affected and three were scrapped.
In May 1982, South Yorkshire county council urged the Government to implement the Flowers commission recommendation that national funds be made available to tackle the problems of river pollution arising from abandoned mine workings. In April 1987, Gordon Jones made the same plea to the Department of the Environment—also in vain. Today, perhaps as a result, south Yorkshire's rivers remain among the filthiest in Britain. Every day, tonnes of toxic chemicals and materials pour into the waterways—often illegally and out of area. Pollution on this scale is no longer confined to south Yorkshire, nor to industry. Pollution from farms has also risen steadily in Yorkshire and Humberside in recent years. The Yorkshire water authority recently announced a crackdown on illegal pollution, but environmentalists and the trade unions involved in the water industry remain sceptical. They fear that the NRA will have insufficent resources and expertise to deal effectively with massive pollution problems.
The number of pollution control staff has been cut substantially since the water authorities were set up in 1974, but, over the same period, the amount of time-consuming monitoring work required has increased in line with ever-stricter regulations. In Yorkshire Water's southern division, for example, which is the area with the highest concentration of polluted rivers in the country, there are more than 1,800 registered dischargers over hunderds of miles of rivers, yet there are only 17 pollution control staff. Will the staffing levels for the NRA be significantly higher than the total pollution control complement that is presently available to the 10 existing water authorities? The privatisation of water is a depressing prospect for Yorkshire in respect of water charges and pollution. The Bill is entirely inappropriate to the needs of south Yorkshire.
§ Mr. Gerrard Neale (Cornwall, North)
It is tempting to take up the points that were raised by the hon. Member for Sheffield, Attercliffe (Mr. Duffy). I am certain that if he discussed the matter with any company that has recently been privatised, he would discover that there is relief among management that it now only has to make out a good commercial case for borrowing money on the open market, whereas previously a commercial case was insufficient and a political case had to be made—among political cases that were irrelevant to it—to obtain the sanction for cash from the Government. In that sense, privatisation offers a great deal of hope to the public sector part of the water industry.
I should like to take up some of the points that were made by the hon. Member for Woolwich (Mr. Cartwright) who, unusually for him, made a speech that did him some 487 disservice. He seemed to throw all his weight against the Bill, and he did not utter one good word for it. He gave the impression that there is no need to change the statutory framework for the water industry. I must tell him that if he talked to any of the 20,000 consumers in the Camelford area of my constituency, he would find that they have no confidence in the existing statutory framework, but they find a great deal of hope in the provisions that have been included in the Bill.
People in the Camelford area would tell the hon. Gentleman—and other hon. Members—that they realise, of course, that it is impossible to have a competitive water supply. In all logic, there can be only one institution supplying water, whether private or public. What has concerned them is the monopoly of power over that supply. Opposition Members have extolled the virtues of the public sector over the private sector. I beg them to obtain a copy of the inquiry report into the Lowermoor treatment works incident on 6 July. If they can still feel confident about the public sector water industry after reading that report, I should like to hear from them individually. It was an appalling chapter in the public water industry.
The events that followed the dumping of 20 tonnes of aluminium sulphate into a tank of water that was prepared for going into the mains and the subsequent chapter of incidents surrounding the discovery of the events that led up to it were unbelievable. People in the Camelford area are considerably reassured by the fact that the inspectorate powers of the Department of the Environment will be increased by the Bill. After the incident, it was evident that, had it not been for the Department's officials keeping a close eye on what South-West Water was doing, consumers would have received less information and the matter would not have been brought under proper control. If my hon. and learned Friend the Minister can give an assurance that the inspectorate will be manned by experienced people and properly funded, that will reassure not only my constituents, but people in the rest of the country.
The Minister is also aware of the incredibly slap-happy way in which the water authority moved quickly to discharge the contaminated water into local rivers and streams. That led to the wholesale killing of fish and was a flagrant breach of all that one would expect from a water authority. If there was ever a case for the establishment of a separate authority, such as the National Rivers Authority, that was it. I am certain that my hon. and learned Friend the Minister is correct in ensuring that that authority is set up.
Other hon. Members have spoken about the authority's funding and powers, and I hope that the Minister will consider those points carefully. My hon. Friend the Member for Pudsey (Sir G. Shaw) said that we must be careful to ensure that private investors have the proper incentives to invest in the companies. I agree, but we must remember that people have to drink the water, so they must have confidence in it.
If the water authorities are to be policed properly, a strong National Rivers Authority is needed. In view of the flagrant breaches in my constituency, people will be reassured by the fact that criminal sanctions are included in the Bill. It is right and proper that if a water authority—or individual within it—is party to water that is not of wholesome quality being put into the system, criminal sanctions should apply. There is a maximum sentence of 488 two years' imprisonment for that. Perhaps my hon. Friend will also consider adding to the Bill a provision for a maximum of two years' imprisonment for anyone who recklessly publishes information that leads people to consume water when it is unsafe for them to do so. That should be punishable by a prison sentence if the circumstances require it. We must ensure that all people working in the water industry have a clear understanding that they have a personal as well as corporate responsibility to supply wholesome water.
I want to reinforce a point that I have made separately to Ministers, which has come out of the incident in north Cornwall. There appears to be no statutory responsibility—and I stress the word "statutory"—for the water authorities to inform the local health authority and the local environmental health authority when it can no longer supply wholesome water. No certain information was given to those authorities in Cornwall, because there was no statutory obligation to do so. Therefore, they did not treat the incident as seriously as they should have done. I hope that my hon. and learned Friend will re-examine that particular aspect and make it a statutory duty for the water authority, in any case in which it cannot supply wholesome water but has, nevertheless, allowed unwholesome water to get into the system, to tell the local health and environmental health authorities. I ask my hon. and learned Friend, in view of the Camelford incident. to give me an assurance in his winding-up speech that he will keep a close eye on the incident and ensure that the Bill covers health matters, which are the responsibility of the Department of Health. The Minister has greatly reassured me, on behalf of my constituents, and for that I thank him. I thank also my right hon. Friend the Secretary of State. They have both been of great help.
My final point is not entirely related to the Bill, and I hope that the House will forgive me for making it. During this incident in north Cornwall, it became clear that a large number of people were using hot water to cook their vegetables or to make coffee and tea.
§ Mr. Neale
Yes, and to cook eggs.
The contaminants in water affect the hot water system much more seriously than they affect the cold water system. It was news to me that no water authority is responsible for supplying wholesome water by means of the hot water system. I hope that my hon. and learned Friend will consider a short advertising campaign to draw attention to such dangers. It would greatly benefit water consumers.
I welcome the Bill. It will greatly improve consumers' water supply.
§ 7.1 pm
§ Mr. Harry Barnes (Derbyshire, North-East)
The last four speakers on the Government Benches said that they approve of the Bill, but they all expressed reservations about it. They fall into two groups: those who stress the role of the National Rivers Authority and who believe that its role is important, and those who are worried about its role and stress the values of privatisation. When those two elements are added together they create the nonsense that is to be found in the Bill.
The hon. Member for Dorset, North (Mr. Baker) argued in favour of privatisation. In his ideological speech 489 he stressed the wide-ranging benefits of the Government's privatisation policy. He referred in particular to the shipyards. I suggest that he ought to look at what is happening elsewhere. The dry docks in Malta are among the best docks in Europe. They are under public control and a system of worker self-management. Workers are elected to the board of management and have an influence on management decisions. Such ownership provisions need to be examined, considered and developed by hon. Members.
We discussed Wales earlier this afternoon. Last night the hon. Member for Antrim, South (Mr. Forsythe) joined in the discussion, as was his right, although the measure does not apply to Northern Ireland. The poll tax will not apply to Northern Ireland either. If the poll tax and what was described last night as the water poll tax were to be introduced in Northern Ireland, where there is vast unemployment, social disruption and division, they would add to the unhappiness of the people of that Province. If the Government understood that point, they would realise what is wrong with such highly divisive measures for the rest of the United Kingdom.
What will happen to the revenues that are raised when the water industry is sold off? We have gone past the stage when we were selling off the silver. We are now selling off the commodes and other basic necessities. The money that has been raised so far has been used to carry unemployment, to help to maintain it and to cut the labour market. It has also been used to cut taxes, which has led to an import-led consumer boom and the current economic crisis. The Government have flogged off the people's assets and then thrown the money down the drain. That includes this measure, which will result in fewer drains and a less effective public sewerage and water supply.
The Prime Minister tells us regularly that the Government have no money—that they have only the taxpayers' money. If that is a simple truism—it is perhaps too simple—it is also true that the Government have no water or any public utilities. The water industry belongs to the people, but its assets are being sold off to groups within society instead of society being given the opportunity to control them. Water belongs to everybody. It does not belong to a special few. A special few will benefit initially from it, but eventually there will be a decline in public health standards if water is privatised. That will create vast problems, and more taxpayers' money will be needed to overcome them.
Conservative Members ought to consider the history of the water industry. They should consider Edwin Chadwick's report of 1842. He stressed the unsanitary conditions in which the labouring population were living in 1842 and the importance of making public provision for sanitary conditions. If inadequate provision is made for sewage disposal, it will affect all classes of society. Edwin Chadwick believed that all classes, including the middle classes, needed a good public supply of water.
There is a statue of Joseph Chamberlain in the Members' Lobby. He instigated many forms of public provision in Birmingham during the 1870s. He upheld the old Victorian attitude of public and civic pride. In 1894 he said: 490It is difficult and indeed almost impossible to reconcile the rights and interests of the public with the claims of any individual company seeking as its natural and legitimate object the largest private gain.These will be called old-fashioned, collectivist ideas. They could not be described as Socialist ideas, because Edwin Chadwick and Joseph Chamberlain were not Socialists. But what of the modern, with-it, dynamic, go-ahead Government who are introducing this measure? The ideas of Chadwick and Chamberlain are supposed to be yesterday's ideas. The Government say that they have new, fresh ideas to offer to us. However, they are old hat, ancient ideas.
The concept of a National Rivers Authority to regulate private industries is taken from economic theorists such as Alfred Marshall in 1890. In "The Principles of Economics" he said that natural monopolies, such as the railways, had to be regulated and that certain conditions had to be laid down for them. All that the Bill means is that 1890 limited provisions are to be introduced. That is in keeping with this Government. Their political ideas go back to Thomas Hobbes in the 17th century, who thought that everybody was selfish and grasping, to the Combination Acts of 1799 and 1800 in relation to the workers at GCHQ and to 14th century medieval provisions for a poll tax.
The Bill is just as bad as the poll tax measure. It means that those who were paying less for their water than others will have to pay more. A larger number of people, living in small houses, will need to use more water than a smaller number of people who live in large houses, and they will have to pay high water rates. This modern, with-it, dynamic Conservative Government are as old-fashioned and old hat as anything that has ever emerged from the Benches in this House.
Just what is this fantastic people's capitalism that we are being offered? Whatever the industry, if the shares are spread among people so that there are tiny bits all over the place, and if a cartel is allowed to have only 4 or 5 per cent. of the shares, who will control the industry? It will be controlled by the small groups who get together. The dissipated masses with their bits of shares will not run the company; it will be run by small, elitist groups. As time goes on, the little people will sell to the big people. Year after year, the top companies listed in "The Times 1,000" book buy smaller groups and split areas among themselves to concentrate capital. Even if people's capitalism could work, it could do so only on market principles where profitability would be the only criterion, and it would not be one of the many criteria that are required for the proper use of resources.
§ Mr. Hugo Summerson (Walthamstow)
Unlike the hon. Member for Derbyshire, North-East (Mr. Barnes), I shall not look back and attempt to give the House an inaccurate history lesson. Instead, I shall look forward to the establishment of the National Rivers Authority, which is an excellent idea. I hope that it will satisfactorily perform its role.
Exactly what powers will the NRA have? On 30 November in my constituency a train carrying oil and paraffin in tankers was derailed. Some of the oil and paraffin got in to the River Lee and it was polluted. Will the NRA have the power to tell British Rail that that section of track is dangerous and must be made safe so that similar pollution incidents do not occur through the 491 derailment of trains? That is not as far-fetched as it might sound. The particular section of track is on the Gospel Oak to Barking line, and I am sure that many hon. Members know that it is one of the worst equipped and managed lines in the country.
I have a strong constituency interest in the Bill because there are six reservoirs in the Lee valley, which take up about one quarter of the land area in my constituency. There is also the River Lee, a flood relief channel, a canal and the Coppermill works—a large water purification plant owned and run by the Thames water authority, which stores 50 tonnes of chlorine gas on site. Because it is a highly dangerous substance, the site is designated by the Health and Safety Executive. Will the NRA have the power to regulate the storage of such chemicals?
I wish to refer to two rivers that I know well—one in the north and one in the south—that I consider to be examples of mismanagement, and explain what I hope will be achieved through privatisation and the establishment of the NRA. The River Skerne lies in the north and may not be familiar to hon. Members. It rises in the north of County Durham, runs through the pit country and through Darlington, and empties into the River Tees a mile or two further south. I know that river well because I was born and brought up in that area. When my father was a boy it was a beautiful, clear stream supporting many types of fish. One day, about 50 years ago, my father went to the river and found a black, stinking ditch. Pit washings from pits in the north of the county had been put straight into the river, which ran black for decades and supported no life. Today, the river apparently runs clear, but it has a nasty smell, has scum and foam on the surface and appears to support no life. The river is a classic example of mismanagement and water authority indifference over many decades. It is a disgrace.
The River Kennet is in the south, and I am fortunate to fish there from time to time when I can scrounge an invitation. The water keeper is concerned about the amount of water that the river carries, because it has declined over the years as a result of abstraction. That problem can be solved only by the metering of water supplies. There is currently no link between cost and consumption. There can be dripping taps in homes, hoses can be turned on to wash the car or to water the garden and then left running, but the bill does not reflect that increased use of water. More and more people and more and more businesses are using water and there must be some form of metering so that people can see how much they are using and understand that they will be charged for the amount that they use. That already happens with other essential utilities such as gas and electricity, so there is no reason why it should not apply to water.
There appears to be great uncertainty about funding. On the national news at 6 o'clock there was an item about a sewer collapse in Bristol. The spokesman for Wessex Water said that it faced difficulties because limits had been placed on its spending and only limited funds were available. He said that he looked forward to the time when the industry was privatised so that it could be released from the constraints imposed by Government. We sit here and talk a great deal, but we are just politicians. What do we know about running the water industry? We should give it to those who know about it—to the experts and to those who can raise the money and put it to good use.
492 The Bill will forge a strong link between the shareholder, the consumer, the taxpayer and the Government. For that reason alone, it will be warmly welcomed.
§ Ms. Joan Ruddock (Lewisham, Deptford)
In a recent poll 82 per cent. of those questioned expressed anxiety about water pollution and only 5 per cent. believed that a private industry could be trusted to regulate itself and control pollution. Nothing that we have heard during the debate leads us to believe that those people were wrong. The Bill is not an expression of the wishes of our people; it certainly is not an expression of the wishes of my constituents.
Although water quality is uppermost in people's minds, many other matters concern them. As has already been said during the debate, water authorities control and maintain not just tap water but sewage, lakes, rivers, beaches, reservoirs and discharges from factories. It is highly irresponsible to be tampering with the existing monitoring arrangements and to be dramatically changing the way in which water authorities are run, at a time when water quality is declining.
Pollution incidents are up by 50 per cent. since 1980, not because of carelessness or a lack of awareness or vigilance on the part of most of those responsible for monitoring and control, but because of Government inaction and a lack of public resourcing. As a result, levels of nitrates, nitrites and aluminium compounds in particular are rising in our drinking water, with a consequent deleterious effect on health.
Within my water authority, Thames Water, there are a dozen areas that suffer from unacceptable levels of nit rites. In Lewisham, samples have shown that on 13 occasions between 1985 and 1987 there were unacceptable levels of pesticide residues. Clearly, the polluters who are responsible for this contamination must be investigated and controlled. However, it is impossible to believe, as Conservative Members have suggested, that putting things right will be achieved more effectively by private companies committed to making profits. On the contrary, everything in the Bill makes improvements in water standards less and less likely. Let us take as an example the agency arrangements which exist in local authorities. Clearly, the Government intend to replace them with private contractors who will take over the sewerage and drainage systems. Those arrangements will put us further at risk from polluted supplies, and the possibility of increasing water-borne diseases.
The rapid repair and sensitive maintenance of sewerage systems are imperative to the prevention of pollution and the maintenance of good standards of public health. The ending of existing agency arrangements would mean that faults would have to be reported to a remote, private water company. The body of knowledge and expertise that exists within local authorities is not duplicated anywhere in the private sector.
The involvement of environmental health officers is particularly important and there is widespread concern that changes in agency arrangements that would make environmental health officers more remote from the managers of sewerage systems could seriously jeopardise the vital work of rodent control in sewers. Perhaps the 493 Minister is not aware that the rodent-borne disease Leptopirosis has caused several deaths in London in recent years.
There are other fears relating to the land sales and asset stripping activities that we are all sure will follow this privatisation. Thames Water owns more than 4,000 properties and 17,000 acres with a value, we are told, of £1 billion. Clearly, they were worth many more billions when planning permissions were obtained. For Londoners, many of those holdings have a significance far beyond their potential commercial value. They have an environmental worth for wildlife and for recreation. They are the green lungs of those of us who live in the congested and squalid inner city. Privatisation and the inevitable maximisation of profit could result in those facilities being lost for ever.
The Government's green veneer is already transparent. They fail to understand the need for open space to be maintained if we are not wholly to destroy wildlife in London, with all the appalling consequences that that holds for our urban environment. Some things cannot be bought and sold to the highest bidder without a disproportionate cost to society.
I am concerned about the people in my constituency who already face enormous difficulties paying their water bills. We do not live in the prosperous south-east. The average wage in my constituency is two thirds that in the south-east, and 12 per cent. of my constituents are unemployed. The social security changes have brought greater and greater hardship and an increase in the number of water supply cut-offs.
The supply of clean water is regarded by the world community as a basic human right and we want to retain that right. I want it particularly for the people in my constituency who cannot compete and cannot pay. It is a mark of the increasing cynicism and inhumanity of this Government that they put profit-making above that right. In doing so, they risk damage to human health and a further deterioration in our natural environment. We can be certain that the arguments put by the Opposition are the arguments best understood by the people of this country and of its capital city. They do not want water to be bought and sold by those who can best compete. They believe in basic human justice and rights. A clean water supply should be the right of every person and every nation.
Whatever happens in the vote tonight we shall have expressed the hopes and aspirations of the people, and their view that this vital commodity should not be subject to the market place as the Bill envisages.
§ Mr. Derek Conway (Shrewsbury and Atcham)
The hon. Member for Lewisham, Deptford (Ms. Ruddock) made a calm and reasoned speech and I congratulate her on that—such is the tenor of most of her speeches—but in fairness I must point out that some of her reasoning was wrong. She was right to speak of her concern for her constituents, a concern we all have, but she must accept that her constituents have long memories. It is not enough to say that all that is to come is appalling and all that has gone before is good. Her constituents will recall, as mine do, the price increases under the Labour Government and 494 that during their tenure of office, capital investment fell by a third. Those are the words, not of a Tory Back Bencher, but of the Select Committee on the Environment. When the hon. Lady comments to her local newspapers, I hope that she will remind them of the historical background that has led the Government to introduce the Bill.
I welcome the Bill, although it will increase our mailbags and increase anxiety in all quarters. The general public read all sorts of stories in the press, including scare stories, and I hope that the tenor of the debate and the opening remarks of my right hon. Friend the Secretary of State yesterday will allay the fears that many constituents have at a time of change. I doubt whether the concern is justified.
The general public appreciate that the job of the Opposition is to try to scaremonger about the denationalisation programme and to say how wonderful nationalisation was and how wicked the Tory party's privatisation scheme is. The public have not fallen for that line in many general elections, because they are not fools and they have memories. Our constituents know that all has not been heaven under the nationalised scheme, and that when they knock on the door of a nationalised industry they can never get a name or have any effect. What pressure can they bring to bear? Many of us have found that when constituents come to our surgeries about a private company it is easier to get redress, action or sympathy from it because private companies are more sensitive to the pressure of the media or to being brought into the public forum of this place than is often the case with nationalised industries. One merely has to travel on a British Rail train that is running late to know how effective one can be in controlling a nationalised industry.
We must be concerned about accountability. The provision for a Director General of Water Services gives more than adequate protection for consumers, as my right hon. Friend explained in detail yesterday. The director general will have to take account of the public view, and he will be able to protect consumers from unjustified price increases, monitor whether there has been a reduction in services and advise Parliament accordingly. I am sure that as a result of that monitoring of performance we shall have a much more effective service than has been possible to date.
I used to live in an area serviced by one of the 29 private boards, and I do not recall that many people knew whether they were being served by a private water company or by a water authority. I do not think that the general public know for a moment. Opposition Members keep telling us about polls, but I wonder whether any have been conducted in those 29 areas to find out how many of the general public know who serves them and whether they believe that the service is different from the one that they will have. I doubt it. The same will be true when the 10 water authorities are privatised.
There has been a great deal of discussion about the NRA, which I particularly welcome. It is a progressive step. While there is general howling in the press, which likes to depict the Tory party as being unconcerned about the environment, this is a major contribution to allay the concern that is felt across the House. Why is it always the wicked Tories who want to see a nuclear holocaust that will wipe out our nation's families? Why is it that we are said to want to see the destruction of the ozone layer, resulting in a hideous future for our children and do not want to see Britain's children brought up in a safer and 495 more pleasant land? [HON. MEMBERS: "Hear, hear."] Some Opposition Members say, "Hear, hear". It is families with children who support the Tory party, not the strange hangers-on that keep the Opposition from getting anywhere near the trammels of government. We have as much concern as any other political party, for our children and grandchildren, and people know that.
The Opposition have engaged in scaremongering about the Bill and about the effectiveness of the National Rivers Authority. Our people do not believe the Opposition, and that has been clearly shown in one election after another. The control of water pollution requires positive measures, and those measures must include far more effective control of effluent discharge. Those matters are of concern to all hon. Members. Sadly, some of the 10 water authorities have been responsible for such discharges. I hope the House will accept that it is not a matter of all that is private is evil, and all that is nationalised is good, because the facts do not prove that. The Bill gives the National Rivers Authority the backing that it needs to get to grips with the problem.
I have a personal and constituency interest in the effectiveness of the National Rivers Authority in dealing with flood defences. All too regularly the part of the Severn that runs through Shrewsbury in my constituency bursts its banks. It is a matter of grave concern to my constituents that when severe weather hits that part of the country the flooding will go too far. From time to time Shrewsbury's main roads are flooded. I look forward to lobbying the NRA for the action that has not been taken by the state-owned corporation. We may have better success now that things are looking a little brighter.
I understand that 90 to 95 per cent. of United Kingdom homes are now connected to the sewerage system, but many villages in my constituency are nowhere near that percentage. During the recess I met my local borough council to look over its plans for the villages. The council thinks that it will be 100 years before some of those villages are connected to the main sewerage system. They have not fared very well under the present regime, and I hope that they will fare better under the new one. Meanwhile, the people in those villages wait patiently.
Another of the great scare stories put about by the Opposition is that prices will double or treble. I understand that about £1.3 billion will be needed to update our sewerage systems and to improve the quality of water. I understand that a doubling or trebling of prices would produce £6 billion. Clearly, some of the stories put about by the Opposition have not been subjected to a great deal of research. At the end of the day, people will see that the Opposition have been crying wolf on this subject, just as they have cried wolf on so many others.
One hopes that the Bill will receive its Second Reading and then enter a protracted Committee stage. I hope that this two-part Bill will be considered in great detail. I am sure that our constituents will be relieved to know about all the consideration that the House will give the Bill. I hope that hon. Members will deal with the detail of the Bill and not engage in filibustering. This is an important matter. Sometimes people are right to criticise the method by which we consider Bills in Committee, where some hon. Members feel that they have to continue talking in order to clock up the hours. I am sure that will not be the case with this Bill and that the Opposition will put forward 496 genuine points of concern, in the certain knowledge that the Government will more than satisfy genuine public concern.
According to public opinion research polls, a ratio of 5:1 does not welcome the proposal. However, that is not the response that I have had in Shrewsbury, and I suspect that it will not be the response to my hon. Friends. The measure will make a big difference to the quality of water. The National Rivers Authority is long overdue and will be welcomed by the House. The Minister has some difficult and long nights ahead of him. The Bill will bring about great improvements in the provision of water, and I hope that the House will support the measure.
§ Mr. Tom Pendry (Stalybridge and Hyde)
Legislation on the water industry would be timely if it addressed the many gigantic problems that face that crucial industry after a decade of under-investment. This tardy Bill will do nothing to ensure that the millions of pounds needed to repair our decaying sewers and to improve the quality of water will be provided.
In my region of the north-west it is estimated that £5 billion is needed over the next 25 years to address the problems that have accumulated in water supply and sewage treatment. Nothing in the Bill convinces me that such investment will be made. The Bill will do nothing to ensure that the quality of water is improved. As the hon. Member for Hornsey and Wood Green (Sir H. Rossi) said, it took the Government an inordinate time to reply to the third report on pollution by the Select Committee on the Environment. That shows the low regard that the Government attach to trying to improve water quality.
The Select Committee sought assurances that were not given. It asked that under a privatised system water authorities would be treated in the same way by the new rivers authority as farmers and industrialists who were guilty of acts of pollution. As we know, the existing controls are far too weak. It is time that polluters paid the full cost of the damage that they cause to the environment. Privatisation seems to be an opportunity for backtracking on existing pollution controls, even though those are inadequate. In pollution cases courts award nominal costs and that makes prosecution financially unviable. In 1984 the report of the Select Committee on the Environment said:Safe, healthy water supplies are totally dependent on effective water pollution control.Four years on and facing privatisation we are no nearer to imposing such controls. The Department of the Environment and the Water Authorities Association figures show that there has been a 50 per cent. increase in river pollution. Why do the Government not address themselves to problems such as that instead of inflicting on people this piece of political dogma? On 25 November The Times leader lined up with the Opposition on this question when it said:Anxieties about the quality of drinking water have grown and river quality has diminished. It is clear that the Government has got it wrong.
For members of my union, the National Union of Public Employees, the problem is not academic, because as quality gives way to profit and cuts, their jobs will be at stake. I am sponsored by that union and I feel as outraged as its members about the consequences of the Bill. 497 The water industry requires investment but after privatisation it is the consumer who will pick up the tab. I hope that the Minister will assure the House that the burden will be passed to shareholders as well as consumers. The Minister should spell out how he thinks water charges will move, especially in my region in the north-west which faces the heaviest rebuilding burden of all the regions.
I am glad to see that the miniature for sport, as he is effectively known, is in the Chamber. He is not wearing his Charlton Athletic tie. It is probably a rambling club tie or some sort of "sexy" tie. Millions of people will be offended by the restrictions on major sporting and recreation facilities that will result from the Bill. In Committee on the Bill about water metering I received no assurances from the Minister. He of all people should have been in the vanguard of those assuring sporting and leisure activity communities about the way in which they will be protected, but he did not do that. I do not know what the Prime Minister has got against the Minister with responsibility for sport. The poor lad has tried to defend the indefensible in measures such as identity cards for football supporters and now this Bill. All those measures come from on high, and he has to carry the can. We feel for him.
I have received representations from many individuals, constituents and organisations who are up in arms about the Bill's implications for sport and recreation. The fine print of the Bill—or the lack of it, if that is possible in such a weighty document—could decimate water recreational and sporting pursuits on water industry and neighbouring land. Clause 7 deals with recreation, but it is no more than a grotesque parody of section 20 of the 1973 Act which places on the water authorities a duty to open up their land for ramblers and other peaceful countryside use.
§ Mr. Pendry
I am glad that I have the support of the hon. Member for High Peak (Mr. Hawkins) who knows something about this matter.
The water authorities responded well to that duty giving access to most of their extensive land holdings. Clause 7 lifts many phrases from the 1973 Act, but they are simply hollow gestures. Clause 7(3) places a duty on the water undertakers to make their land available for recreational purposes. That has already been interpreted as a way of exploiting available land in an uncontrollable way. Roderick Paul, chief executive of Severn-Trent, said:I accept that we have not had to develop the skills required for pleasure-type exploitation. Where there is a scope for that, we might franchise it.Will the Minister responsible for sport comment on that as soon as possible?
§ Mr. Hawkins
I want merely to support the hon. Gentleman. The important thing about clause 7 is that, although legal rights of way will be protected, all the access agreements that have been signed voluntarily have no protection. I have one of the largest national parks in 498 Britain in my constituency and there is no protection in the Bill for those rights of access to the Peak district and the Pennine way. I hope that the Minister will ensure that that point is considered seriously in Committee.
§ Mr. Pendry
I am glad that I gave way, although I hope I shall not be penalised. I hope that the Minister is aware that the open and free nature of mountains and woodlands provide a strong attraction to many citizens. Walking in the countryside is still one of the most popular outdoor pursuits. Some 8 million regular ramblers use our open countryside each week. Perhaps the Secretary of State should follow that example and take a walk—many of us would suggest a very long walk and would like him to take the Minister of State and the Under-Secretary with him.
Charging for access to our countryside is anathema. It is odious and alien to the British way of life. It should be clearly and unambiguously ruled out, not sneaked in at the back of a clause which promises greater access, but in reality removes it.
The code of practice in clause 9 provides no more comfort. Like clause 7, it applies to water authorities but not to enterprise subsidiaries and subsequent landowners. It is weak and ineffective and should be replaced with adequate safeguards. The Bill does not even touch on the thorniest point, the extent to which the Government want the NRA to contract out work. How on earth can the NRA conserve the use of land and water if it gives its regulatory functions such as quality monitoring to others, perhaps even to the water companies which may be polluting the water. The Bill cuts across all recreational users of the countryside. Organised sporting pursuits will be threatened too. The Central Council of Physical Recreation rightly wants to enshrine in the Bill a strong code of practice for both water companies and the NRA. In particular, there needs to be maintenance of current recreational facilities and pricing must take into account the financially disadvantaged groups. That was never touched on by the Minister who opened this debate.
What is needed and is sadly lacking from the Government is consultation with interested parties before such legislation is drafted. Unless the Government talk and, more importantly, listen to groups ranging from the Council for the Protection of Rural England to the regional sports councils, all the developments in recreation during the past decade will be wiped away. In my constituency it would be a tragedy if the paths and riding trails with facilities for the disabled and the water sports in the Longdendale valley were lost in a tide of political dogma. For those reasons and many others, I shall vote against the Bill tonight.
§ Mrs. Gillian Shephard (Norfolk, South-West)
I very much welcome the opportunity to contribute briefly to the debate. I apologise to the House for the fact that I was unable to be present earlier today, although I was here yesterday. I perceive that, regrettably, there is in the House an urban-rural divide in attitudes to the Bill. In my constituency the supply of water and its management have a peculiar significance, composed as it is partly of fen land, which requires carefully regulated drainage, and partly of light land, which requires considerable irrigation if it is to produce crops at all, and containing an important source of domestic water for a large part of East Anglia at Denver sluice. In addition, part of my constituency is deliberately 499 flooded each year. Washes constitute an important flood defence mechanism. Therefore, it is easy to understand why the passage of the Bill is being watched closely by my constituents. Many of its provisions touch their lives very closely.
Many of my constituents will be as astonished as I was to learn that 96 per cent. of the population of Britain are connected to a sewer—as some of the background material quaintly puts it. I have lived half my life unconnected to a sewer, as have many of my constituents, and can only say that a considerable proportion of the remaining 4 per cent. of the population must live in Norfolk or, more particularly, in south-west Norfolk.
Rural people do not take water for granted. It is not something which they simply drink and wash in, but something which they understand is necessary for their working lives and for their environment.
Mention has been made of the political dogma behind the Bill. I assure the House that in south-west Norfolk it is not regarded in any way as a political problem, but as a deeply practical problem that affects everyone. The establishment of the National Rivers Authority and the office of Director General of Water Services and the powers that they will have will provide better protection for the consumer and for the environment than we have enjoyed hitherto, provided that those bodies are adequately funded. As has been pointed out, the fact that water authorities have responsibility for sewage disposal and for pollution control has always seemed to be anomalous. It is certainly a system that has lacked credibility with the public. Clearly, the functions should and will be divided, according to the proposals in the Bill.
The office of Director General of Water Services is welcome, as he will be directly accountable to Parliament for the regulation of charges, the standard of services to the public and the proper provision of the infrastructure of water services. It will be important for the public to feel —as they do not in my constituency at present—that the buck for charges and the service provided stops with someone. I sincerely hope that the director general and his customer service committees will prove to have effective teeth. It will be interesting to see precisely how, if the Bill gains its Second Reading tonight, he will be equipped with those teeth.
In East Anglia we are served by a very large water authority. Until the last couple of years its response to the public and its accountability have left a great deal to be desired. We also have a statutory water company, and there are not many fears in my county about changes affecting the water authority. When it was first established, the point that stuck in most people's minds was the size and splendour of the headquarters which, as its first task, it was setting up for itself. Many people in my area will be glad to have a more cost-effective and cost-conscious water authority.
It is clear that, given their dependence on private land drainage, and on water abstraction for irrigation and flood defences, members of the agricultural community are carefully watching the Bill and its contents. Their attention is focused on the nitrate content of water. As hon. Members and farmers know, if no action is taken, nitrate levels in the United Kingdom will reach unacceptably high levels by the end of the century. East Anglia has one of the highest nitrate levels in the country and, incidentally, the 500 lowest incidence of cancer of the bowel. High nitrate content must be tackled by a partnership between agriculture and water services.
Provisions for the compulsory establishment of protection zones already exist in the Control of Pollution Act 1974, although I believe that they have never been used. No one would argue that such powers should not be retained as a fallback, although, where possible, restrictions on agriculture should be voluntary. The National Farmers Union has promised its fullest co-operation with the new water authorities. As yet, clause 104, which deals with that point, contains no suggestion about how objections might be considered or, if necessary, a local inquiry mounted. I hope that the discussions that are taking place between the industry, the Ministry of Agriculture, Fisheries and Food and the Department of the Environment will result in such provisions being included in the Bill.
Farmers are defensive about nitrate levels in water. They accept that more intensive agricultural production is to blame for increased nitrate levels. However, they make the point that they should not be penalised for increasing production when successive Governments have urged them to do so.
As I have said, the NFU has offered to co-operate fully with the Government and the new water authorities to reduce nitrate levels, by a joint approach. There will need to be treatment by the water industry to deal with the problem, and changes in agricultural practice which have been introduced over the past five years to reduce the problem at source. It will be a major task for the new water companies and agriculture to consider ways forward.
No doubt some changes will be based on the range of desk studies that were jointly commissioned by the Ministry of Agriculture, Fisheries and Food and the Department of the Environment in 10 varied localities. The Ministry believes that if farmers are obliged to restrict agricultural activities beyond what could be regarded as good agricultural practice they should be compensated. The Ministry has promised that the arrangements will be announced during the passage of the Bill. The matter is regarded with some interest and not a little anxiety.
If the Bill receives a Second Reading, it will provide an improved service for people in the area that I represent. I do not believe that there is heartfelt support for the way in which water is provided at the moment. People consider that water authorities are not accountable. If they telephone them, they speak to an answerphone. They consider that the authorities have been altogether too lavish in the provision that they have made for themselves, whereas they should always have been concerned about the consumer and the uses of water, a commodity which, as I have tried to explain, deeply affects the economy of my constituency. I hope that the Bill will be successful this evening.
§ Mr. Elliot Morley (Glanford and Scunthorpe)
The Bill opens a Pandora's box of issues relating to monopoly of supply, quality, the environment, rights of access, and, not least, consumer rights. It is worth remembering that the history of the delivery of safe, clean water in this country is with local authorities. Originally, the free-market system failed, and local authorities had to rationalise it and ensure quality of delivery. I have not heard any mention of the 501 fact that, in 1974, many local authorities passed on a great deal of valuable land to water authorities. I wonder whether those local authorities will get any share of the proceeds of the sale of land which many of them bought with their own ratepayers' money. Incidentally, many local authorities ran water services with considerable efficiency and at considerably lower cost than non-elected local authority quangos.
The Bill boils down to the Government's constant claim that everything public is bad and everything private is good. That simplistic view is the root of the privatisation of major utilities such as water supplies. There is no evidence to support the claim. If we consider what has happened to privatisation projects, such as the contracting out of cleaning in education establishments, we find some spectacular failures, which are well charted in a Trades Union Congress publication entitled "Contractors' Failures".
I noticed a letter in today's edition of The London Evening Standard—one of the Tory party's house papers —entitled "Gas, for the record." It is from Mrs. Donaldson of Huntsworth Mews, NW1—not a Socialist stronghold. She outlines a diary of events from 19 August to 25 November and all that she went through in getting a central heating boiler replaced. Her final paragraph, entitled "Conclusion", states that, since privatisationAbsolutely nothing has changed at British Gas!
That is a fair comment. I am not saying that British Gas is particularly inefficient—it was a fairly efficient organisation before privatisation—but things have not changed. It is certainly not my experience or that of that consumer that things in the private sector have got any better. However, there have been one or two changes in British Gas. For example, there has been a 47 per cent. increase in gas disconnections. British Gas has been referred to the Monopolies and Mergers Commission for abusing its monopoly powers. There have been one or two little changes since privatisation.
British Telecom is not a great advertisement for the success or efficiency of a privatised utility. The Consumers Association, in its report, stated that the majority of business users who answered its questionnaire said that the quality of service had gone down since British Telecom was privatised, and that claim was backed up by the majority of domestic consumers. The claim that things are necessarily better in the private sector than they are in the public sector does not stand up to examination.
How will consumers be affected when things such as water meters are inevitably brought in? There is no doubt that water price rises will be considerable. The Confederation of British Industry put the figure at about 30 per cent.
Part of the problem with water privatisation is that it has suffered from completely artificial restraints. It is nonsense to say that it can raise more capital in the private sector than it could in the public sector. It has not done so, only because it has been refused permission to borrow privately, and it has suffered from artificial cash limits. In my constituency, investment in a multi-million pound food factory was jeopardised because there was some doubt whether the local water board could provide the infrastructure for effluent treatment. That factory could have been lost because of the artificial restraint imposed upon it by the Government. I suspect that industrial 502 consumers will find a considerable increase in effluent disposal and water charges. There is no great benefit to industrial or domestic consumers.
One of the most objectionable things about water meters is that they will penalise those people with families on low incomes. Those people will be forced even further into the poverty trap because their water bill will increase considerably.
There will also be problems for people who live in rural areas. The Bill will replace section 30 of the Water Act 1973 and allow the new privatised water companies to charge differential rates for providing water and sewerage services to the community. Under the new legislation, people who live in isolated villages and on farms will be asked to pay differential water rates when, under the existing leglislation, those costs are spread out evenly among all consumers. How will constituents in rural areas react when they find out that that applies to them?
The environmental aspect of the issue is important to me. I am glad that my hon. Friend the Member for Alyn and Deeside (Mr. Jones) is present to hear my comments. Among the things that has given me a lifelong interest in natural history was a visit to Lake Vyrnwy with the Merseyside natural history association when I was a teenager. The fact that I had access to that site, which is managed as a nature reserve by the Royal Society for the Protection of Birds—one of 77 sites on water authority property—has had a lifelong effect on me. I am worried that other teenagers from inner cities will be denied that experience. Such access will be lost, because of the high charges that will be imposed by the water companies. Under their obligations in the Bill, they will have to maximise their profits by charging for leisure use of and access to their land.
I welcome the setting up of the National Rivers Authority. That is a step in the right direction, but we could have had that without going through the whole privatisation process. However, I am concerned about funding arrangements. The NRA will be left with the state and will receive a grant from the Government. It will not be funded through a levy on the water authorities or through a share of their income. Therefore, it will be vulnerable to the cash limits imposed on the public sector by the Government. Will it have the resources to carry out its role in flood defence and drainage work? Will it be able to meet its obligations to conserve nature in water authority areas and to enforce the regulations laid down in the Bill? There is no obligation in the Bill for a report on environmental support and no obligation for the NRA to employ people responsible for conservation.
There is also some doubt about the consultation arrangements—for example, in respect of the regional rivers authority advisory committee. It does not appear that people involved in conservation organisations will automatically be represented on that body. That problem must be resolved.
Clause 7 is contradicted by the need to make a profit. It is all very well having a code of conduct, but that is undermined if a company's main obligation is simply to maximise its profits.
I am also worried about the fact that many of the NRA's obligations can be contracted out. Some of them can even be contracted out to the water plcs. The water plcs may, therefore, win the contracts for the important monitoring work which will enforce the law but, at the 503 same time, undermine the NRA's position. The contracting-out might by won be people who cannot do it properly.
I have an interest in wildlife and nature reserves on water authority property. I am an elected member of the council of the Royal Society for the Protection of Birds. Many hon. Members will have received briefs from organisations such as the Countryside Commission, the Ramblers Association and the Royal Society for Nature Conservation. Those responsible bodies reflect the opinion of millions of people in this country and express grave doubts about the legislation. They have made it clear that they do not believe that the Bill will be of advantage to the environment. The Royal Society for Nature Conservation's news release has the headline:Water privatisation proposals are no charter for wildlife.The organisation makes it clear that the Bill does not go far enough and does not guarantee the protection of the natural environment or access to the areas involved.
Areas such as mine, which are predominantly rural, have problems with nitrate pollution. We are concerned to know whether the privatised water authorities will make available investment to deal with that problem. We are also concerned that the privatised authorities will not make available the money for the enormous infrastructure replacement that is required in many parts of the country. The privatised water authorities will have to pay corporation tax, and, as I understand it, they will no longer be eligible for European regional development fund grants for infrastructure investment. This is a considerable loss in terms of subsidy.
Many other issues in the Bill need to be clarified. I cannot forecast what the outcome will be, but it is safe to predict that the Bill will mean yet more looting of public assets, more speculators lining their pockets, the public paying higher prices for a service that was delivered efficiently and cheaply in the public sector and no guarantee of an increase in quality or an improvement in service to the consumer.
§ 8.6 pm
§ Miss Emma Nicholson (Torridge and Devon, West)
Thank you very much for calling me in this most important debate, Madam Deputy Speaker. I was fortunate to serve on the enabling committee where I learned a great deal about water metering and an enormous amount about the water industry in Yorkshire. Perhaps I can take my revenge for a brief moment or two by talking about the water industry in the south-west.
I apologise for missing a few hours of this important debate today. I was here yesterday. However, I arrived today about three quarters of an hour ago. I hope that hon. Members will forgive me when they learn that I have been celebrating my father's 87th birthday. My father is a former Member of this place. Hon. Members will guess that, for the past few hours, water has been measured more by its capacity not to dilute whisky too much than by its real importance.
Water is the most important thing of all. Surprisingly enough, we can live without food for quite a few days, although one might not think so in this building where there are so many places to eat. However, we cannot live without water. I have spent quite a lot of time working in developing countries. One appreciates the crucial importance of water in life when one sees women walk for half a day to fill some wretched pot with a scrap of water 504 that we would use to wash up after a meal and when one knows that diarrhoeal diseases in children are cut by 50 per cent. by the simple means of teaching mothers to take water for their children to drink from above, not below, the place where they discharge human effluent. One also understands why projects involving camels, such as the farm project in Kenya, are important. It is because camels store water. That is why I value so highly the water industry's own charitable project for water overseas—Water Aid. Water matters to human beings and one can see that clearly when one works in developing countries.
I wonder whether we can use all these important lessons about water in this country. Have we watched the Golden Horn being cleaned up? That vast area, which was so difficult to water, is fast becoming much cleaner. Have we taken these lessons on board in the United Kingdom? We are in a crowded island with increasing industrial pollution. A mistake by a foreman turning a tap the wrong way can kill off water quality in a river for several weeks. Farm effluent from raising cattle indoors, which can be equal to that produced from a small town, can, if there is a mistake, cause great damage to water quality in rivers. With intensive farming, have we looked closely enough at ways of providing the sort of water quality that we need? Under this flood of effluent from people, industry and farms, the quality of many of our rivers has declined in recent years, and we have to put it right.
In my constituency we have a famous and beautiful river—I am sure that all hon. Members know it—the Torridge. It is famous because of Tarka. Last Christmas, hon. Members may have seen a programme on television called "Tarka's Troubled Waters." Mercifully, it was out of date by the time that it was shown. I was heavily criticised for saying that the Torridge had been badly polluted for many years, but was now being put right again and would soon be properly right.
The improvement is the result of a major farming programme. Many farmers who use intensive methods throughout the United Kingdom do not realise the extent of the pollution that they have been causing. South-West Water in my area—and I am sure that equivalent water authorities in many other areas have been trying just as hard—has been running an effective farm pollution programme merely by going out and talking to farmers about pollution and helping them with finance to put it right. As a result, there were more brown trout in the 12 months from Boxing day last year than for many years. The quality of salmon fishing has also gone up.
It can easily be said that these are minor interests and that only a few people want to go salmon fishing, because, although angling has the largest following of any sport in the United Kingdom, fly fishing is quite rare. However, in my area, as in others, we derive much of our drinking water from rivers. Therefore, we want the water to start off as clean as possible, so that it does not have to be put through massive cleansing programmes. Because of the success of that farming programme in our moorland hills, I was more than delighted to welcome the announcement by my right hon. Friend the Minister of Agriculture, Fisheries and Food about a week ago of the fact that he is putting £50 million into farm pollution programmes. That is really exciting. We are on the way, and I am pleased about it.
I was even more pleased when South-West Water committed itself to full treatment of this river and of Bideford sewage in the estuary in which the river ends. 505 Therefore, we shall have a pure and gleaming Torridge before long, as I promised last year on television, and a cleaned up estuary. I welcome the visit that my hon. Friend the Under-Secretary is to make on 13 January. We shall be able to show him the progress that has been made. The river is not unique. There are others like it. We have to set our sights on cleaning them all.
I shall also be taking my hon. Friend to see a small area called Lifton down. I bring this to his attention because the water supply there has been disgraceful. One might just as well have been living in the Sudan. If one turned on the tap, put in the plug and waited for a day, one would be lucky if the bath were half full. People have shown me water straight out of the tap that is almost a third sand, or something worse. Is it right that water should be like this in the United Kingdom, a developed country in the European Community, in this day and age? Bere Alston is a tiny village where a mother and baby have not been able to get fresh water in the middle of the day for hours at a time.
Both these areas will have the proper amount of capital invested in them by South-West Water to ensure that these problems are solved. Should it have taken 15 years for Lifton down water to come right, 20 years for Bideford sewage and the Torridge river to be cleaned up, and seven years for Bere Alston to have its problems solved? The raising of standards is one of the reasons why I welcome this Bill so very strongly, as does South-West Water, whose chairman, Keith Court, has worked tirelessly to raise water quality in the south-west. He has carried out a remarkable job. I am delighted that he is in post and will be continuing as chairman of the new plc.
What is necessary for the development of the infrastructure for water in my area, and I would guess in those of many other hon. Members, is intensive injections of capital. That is difficult to achieve when one is in competition for national funds against other great social needs, such as child care, health facilities, nurses' pay and the NHS. It is difficult to get the right amount of capital when social needs are so pressing. I believe that our new plcs will be able to make much faster progress in developing the infrastructure needed to get water quality up to the standards that we all quite properly demand when more options are open for finance once they are in the private sector.
On top of that, it will be possible to spread financing over a longer period. The great difficulty of working within Government constraints of 12-month intervals is that it is easy to go for a stop-go policy and not think what that means. It means stop on 31 March and start again on 1 April. One is tied to annual budgets when working within the Government and public sector funding programmes.
There are many good factors in the Bill. One of the best is that it demands new, higher standards for water quality within the United Kingdom, and I most strongly welcome that. We shall be shifting from expecting an average level of attainment in water quality to a higher standard of attainment in both the quality of water and its pressure —we are back to that half-empty bath—and to higher environmental objectives. We must willingly accept those environmental objectives. People are more and more conscious of the environment, and it is crucial that we respond to the desires and wishes of the general public.
506 Standards will be much tougher for the new public limited companies. They will be required to produce much higher standards on effluent levels, and we all want that. It will be hard for them if everything has to be perfect on day one. I know that my hon. and learned Friend the Minister will already have thought of the need to be practical and reasonable with the new plcs on such matters, or they will have pressures to which they simply cannot respond. That is a most important point that I ask my hon. and learned Friend to note.
It is also important, although it may seem an unpalatable point to make at the moment, to have within the pricing structure of the plcs the opportunity to obtain a reasonable rate of return. These new regulations will create water quality standards in the United Kingdom that will be at least the equivalent of the highest in western Europe. The Bill will require and create sewage disposal standards that will match European directives. That is why I so greatly welcome it.
I am conscious of the fears expressed by some hon. Members both yesterday and today about the need not to create a private monopoly in supply. However, I believe that the new inset competition and the pledge in the Bill that the plcs will operate in a "climate of effective competition" will be carried through and will create the necessary competition.
The split must occur. I welcome the creation of the National Rivers Authority, because the water authorities will no longer be required to be both poacher and gamekeeper. It is beyond human endeavour to be required to fine oneself for breaking the law. People are just not made that way. It certainly has not been the way in which the water authorities have been made. It is right and proper that the National Rivers Authority, with proper people and financing, should be responsible for the quality of the rivers and that the plcs should provide the water and sewage treatment.
I am conscious of the importance of safeguarding conservation and recreation. I note that in the Bill prior consultation is required before there is any development of sites of special scientific interest. In my constituency, there is a large part of a national park. I wonder whether the Minister would consider extending that need for prior consultation to national parks. That would reassure many people. The water authorities have built up an excellent relationship with the national parks, and I would not wish that relationship to do other than flourish under the new arrangements. I believe that that sort of reassurance is all that is required to maintain such a relationship.
I warmly welcome the Bill.
§ Mr. Martyn Jones (Clwyd, South-West)
When I had a proper job, I worked for a major user of water—although the company would probably be reluctant to admit it—the brewing industry. In fact, the brewery in which I worked is the major water user in Wrexham and, bearing in mind the lack of industry in the area, it is probably the main user in Clwyd. It was often my task when working in the laboratory to check on effluent and it was always my responsibility to monitor incoming water.
The supplier of the water is a private company set up by statute, which my hon. Friend the Member for Alyn and Deeside (Mr. Jones) referred to as a potential takeover target by, possibly, an overseas interest. It is an example of 507 the much-vaunted Victorian values that we are regaled with by the Government, because they saw fit to control such monopolies very tightly indeed by Act of Parliament.
With this Bill, we will create private monopolies with no such controls. It is obvious even to the dullest person that the opportunity for competition in what is described in economic theory as a natural monopoly does not exist. With no upper constraint on prices, and the provision that extra costs incurred in maintaining standards of quality will be passed on to consumers, the consumer will pay, not the polluter.
What will be created is analogous to providing local supermarkets that consumers are obliged to use. Consumers would have free access to the store but a tax would be levied on local residents to meet the costs incurred. How can there be any increase in service or consumer responsiveness when additional business yields additional cost but no additional revenue? That is dogma gone mad.
How can the National Rivers Authority perform such a wide task? The task is obviously necessary. Indeed, if a chain of supermarkets were set up like the water utility public limited companies, there would be overwhelming public demand for control. That will only apply to the National Rivers Authority when things begin to go wrong, which is likely. Unscrupulous polluters will drive a coach and horses through such a body. Unscrupulous water utility plcs, which are potential and, indeed, actual polluters, could flout the provision of control. In fact, they will continue to be allowed to pollute anyway, because of the previous lack of investment. How long that continues will, of course, depend on how quickly investment can be attracted, which, in turn, will depend on how much profit can be generated by an increase in charges, which will go directly into private owners' hands.
As well as having experience of the industrial use of water, I have a constituency interest, because large areas of my constituency are owned by water authorities and I have a large new reservoir, neither of which are inside a national park, and are, therefore potentially asset strippable by new owners. A long length of the Dee runs through my constituency and that attracts a large number of recreational users, such as anglers and canoeists. It is also the main aquafer from Bala, Clocaenog and Celyn to abstractions for Liverpool and Chester, as well as Wrexham and Deeside. The potential for conflict and chaos is enormous. There is no protection of access for anglers and ramblers. Plenty of potential exists for charging for those recreational activities, but little opportunity for the legitimate representation of the interests of those who use the river.
The NRA will have no effective local management structure. In my constituency, the Dee is a special case as it is arguably at present the most controlled and regulated river system in Europe. The control of the flow is crucial to fishing interests. General targets for water utility plcs will not be good enough. The control of the flow must stay in the public sector and must be enforced for the benefit of local recreation as well as profit. Local management boards are needed to give the NRA teeth, or it will be an under-funded and ignored paper tiger.
A conflict always exists between profit and service. Private non-monopolies resolve that by realising that service is necessary or competitors get the profit. Private 508 monopolies simply screw the customer, who has no choice. That is what will happen with water. It is political dogma taken to the point of fetishism.
§ Mr. Tim Devlin (Stockton, South)
I am sure that the hon. Member for Glanford and Scunthorpe (Mr. Morley) did not mean to mislead the House when he claimed that the CBI said that price increases of 30 per cent. were expected. I consulted the parliamentary brief to which he referred and I saw the sentence:However we have noted certain reports suggesting that privatisation may result in increases of up to 30 percent".That does not, in fact, emanate from the CBI.
I have listened with interest to the speeches. My hon. Friend the Member for Warrington, South (Mr. Butler) talked about the quality of water in east London where I live during the week. I understand that water in that area has usually been drunk five times before it reaches the lips of an east Londoner. My hon. Friend the Member for Walthamstow (Mr. Summerson) commented on the river Skerne, which is in the north east. Having heard one northern Member talking about London and a London Member talking about the north, I was tempted to talk about somewhere in the south-west. However, my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) set out the worries of her constituency so well that I need not bother.
Water supply and sewerage are the most important of our public services. I welcome the Bill because it is designed to provide better quality water than we presently enjoy and at the lowest price to the consumer. It will free the water service of Treasury controls and it will provide attractive share ownership possibilities for many in the industry and for the public.
There is no doubt that the introduction of comparative competition in the water industry will provide greater incentives to our water providers to keep supplies clean. I do not for one moment accept that privately-owned water companies will be motivated solely by shareholders' profit, which has not proved to be the case with British Telecom or other industries that have moved into the private sector and where there have been significant service improvements.
The new statutory water undertakings will only carry on the good work already done by the 29 privately-owned companies, which provide one quarter of the nation's water. In the north-east, where I come from, the Hartlepool water company provides a good example of how good, clean water can be provided by a privately-owned company. Last night the hon. Member for Copeland (Dr. Cunningham) said that these private water companies were "statutory water companies" and not private enterprise. I asked whether the Opposition would find it acceptable for a number of privately-owned companies, which had statutorily defined duties, to come into being. That question was never answered. However, I believe that we have heard the answer in today's debate.
As usual, we have heard all manner of scaremongering and at times like this it well behoves the House to recall the scares put about when we abolished the metropolitan authorities or when we deregulated the buses. Part of my constituency is a large rural area which has a better—not worse—bus service as a result.
I want to suggest one possible amendment that the Government might care to consider. When water quality 509 suffers due to some catastrophe, such as that recently suffered in the south-west to which my hon. Friend the Member for Cornwall, North (Mr. Neale) referred, or when the water supply is cut off, as it can be from time to time even in the best regulated system, rebates or even compensation payments should be made to customers.
Customers are entitled to expect an extremely high level of performance from the new water service pies created by the Bill. Those plcs will be subject to the stricter pollution controls that will be imposed upon them by the National Rivers Authority. They will also have to respond to statutorily defined quality standards that will be higher than present. That will include directives on water availability, pressure, constancy of supply and response times to repair and billing inquiries. The customer must be able to notice those improvements and obviously there must be a reserve power in the hands of the Secretary of State to intervene when those plcs fail to reach the targets.
I believe that the most effective pressure on water service pies would be a statutory method of automatic compensation or rebates when a company fails to meet standards or cuts off the water supply. That would be a simple, ready-at-hand scheme, so that a customer is ensured of receiving satisfaction without having to mess about and set in motion long-winded procedures.
It should be noted that, where a water authority owns land in a national park—for instance, 37 per cent. of Northumbria Water's land is in the national parks—there is no question of that land being sold to property developers for despoliation. Land in national parks is guaranteed to be accessible to all by the legislation that established them. Rights of way continue irrespective of ownership and it is only sensible that the Bill includes safeguarding powers for water catchment areas. Therefore, let me speak to those outside these walls, for example, the Ramblers Association, whose concern I readily share. That measure of concern, however, is being unnecessarily aggravated and, if necessary, that concern can be cured by drafting amendments in Committee.
We heard some amazing things earlier about sewage treatment and land being sold off. Here, for the first time in decades, is an opportunity for water service plcs to raise money from other than the Treasury to invest heavily in the sewers. That opportunity, however, is condemned by the Opposition. We are also being given an opportunity to ask water authorities what use they have made of taxpayers' money. If it is true that water authorities have prime sites and other surplus land and buildings that are not being put to the best use, why are they still in water authority ownership? Why have those assets not been sold off long ago so that the taxpayer can benefit from the capital received? The purpose of a water authority is to provide water, treat sewage and to check water pollution, not to own land for its own sake. Water service plcs should have no compunction, therefore, in disposing of land that is not connected directly to their primary purpose. Any land disposal will, of course, still be subject to the planning controls of the specific area.
The House may be aware that my constituency includes a long stretch of the River Tees. We produce the best bottled drinking water that can be obtained in the United Kingdom—Northumbrian water. A private Bill will be introduced shortly to erect a Tees barrage. That will raise 510 the water level by 2.65 m throughout the length of my constituency. Undoubtedly that will have an effect, not only on the farming community but on those businesses that currently emit effluents into the river. My hon. and learned Friend the Minister should bear in mind that his Department deals with the environment as well as inner cities. The barrage is an inner-city initiative that will undoubtedly have serious effects on the surrounding countryside and on the environment. Can my hon. and learned Friend tell me whether a full environmental assessment will be undertaken on the River Tees before that barrage is erected? Otherwise the NRA will find itself saddled with a river that is half clean and half filthy. It will then have to pick up the bill, and the costs to the local consumer.
The Opposition have erected a barrage against the Bill from which very little common sense has leaked. By contrast, the Government will erect a barrage on the River Tees that will open up a wave of new opportunities on Teesside in the next century.
§ Mr. Eric Martlew (Carlisle)
I must place on record my total opposition to the Bill. The idea of privatising the nation's water is something that must be spoken against. The Labour party must commit itself—let us use an old-fashioned word—to taking the water industry back into public ownership. There is no doubt about that.
Opposition to the Bill is not apparent only on the Labour Benches, because there is opposition to it throughout the country. Given that there are so few Members on the Conservative Benches tonight, I suspect that there is also a lot of secret opposition within the Conservative party.
A recent opinion poll showed that more than 80 per cent. of the population were against the privatisation of water. Why is there such massive opposition? The attempt to sell off the water industry has made consumers think about the service that they receive, and most of them are well satisfied. Today, 99 per cent. of British households are connected to the public water supply—they have water on tap—and 95 per cent. of households are connected to the public sewerage system. Therefore, when they turn on the tap they get clean water, and when they flush the toilet the sewage goes away.
The British people know that the system works and, unlike their experience with British Telecom, they encounter few problems with it. It can take days to get a telephone line replaced, months to get a telephone installed, and one is extremely lucky to find a public telephone that works. In comparison with the privatised industries, people are pleased with the service that they receive from the water authorities and companies.
The public are also against privatisation because of the pressing environmental problems. The pollution of our rivers, lakes and course lines have been mentioned by hon. Members on both sides of the House. We realise that massive sums of money are needed to put things right. The public do not believe that profit-hungry private water companies will be prepared to put in the money that is needed to solve the environmental problems. They are also well aware that the Conservative Government will not make those private water companies invest their money to solve those problems. 511 People are also against privatisation because they know from history that the privatisation of water does not work. They are aware that in the 19th century the private sector failed. If any hon. Member cares to look up 19th century copies of Hansard he will see that Act after Act was passed to force improvements in water standards. At that time people were dying from cholera and typhoid because the private sector would not put resources into the water industry.
By 1913, 80 per cent. of all water was in local authority ownership, and that has remained the position. Privatisation did not work, and Governments of both Liberal and Conservative persuasions put water into public ownership. The position in my constituency was little different from the national one. It suffered epidemics of cholera and typhoid that killed many citizens. The local authority decided to spend ratepayers' money to provide an adequate sewerage system and a good water supply system, and that policy served the city well. It got rid of the city's health problems and allowed it to expand.
In 1974, the citizens of Carlisle were not too enthusiastic about the proposal of the then Secretary of State for the Environment, the right hon. Member for Worcester (Mr. Walker), who is now the Secretary of State for Wales, to introduce the present water authorities. They had a cheap water system that worked, and they were not far away from the supply. We in Carlisle realised that if we went in with North West Water, our £10 million-worth of assets would go into the general pool and our rates would increase as we would be called upon to pay in part for the problems of Merseyside and Manchester. We accepted that, but we are not prepared to accept robbery of the £10 million. It was taken from the citizens of Carlisle, made available to the water authority and not paid for through taxation. It is now proposed to sell off the water authority, and the people of Carlisle consider that to be an act of robbery. They regard those who occupy the Conservative Benches as pirates. That is why there is opposition to the Bill.
Last week I decided to visit the local sewage works in my constituency. Those who work there were quite surprised to be visited by a politician. It is not often that politicians visit and shake hands with workers at sewage plants. We visit hospitals and old folks homes, but not sewage works. Before the Third Reading, I recommend all hon. Members to visit what is the most important building in their constituencies. Without sewage works, the civilisation that we know cannot exist.
During my visit. I asked questions about profitability and how it could be improved. I was told that it would be possible to cut labour costs. I was told that the men were not paid very well, but that wages could be cut slightly, which would increase profitability. I was told also that the work force could be reduced, although that would lead to an increase in pollution problems. It was explained that in the event of an overflow, and with insufficient staff, the rivers would become polluted. It would be possible to reduce the number of chemicals that are put on the sludge. The chemicals reduce the smell, and anyone who lives downwind from the sludge will consider that to be important. There is no profit to be gained from using chemicals, and so the number used could be reduced.
I left the sewage works with the knowledge that we have an efficient system in my constituency. I know that £2 million was spent during the 1980s to update it. 512 Privatisation would lead only to a worsening of the system for those whom I represent. There is no doubt that sewage works must remain in the public sector.
To whom does water belong? I was taught at school that it was a gift from God. We are all familiar with these lines:
Little did I realise that economists would seek to calculate the value of a raindrop. The Secretary of State is taking up one of Bing Crosby's old songs, "Pennies from Heaven". A value is being placed on a raindrop. It is being costed, and then raindrops will be given away to the private sector. In the City, stockbrokers and others are singing the Gene Kelly number, "Singing in the Rain". They are all to make a fortune out of it.
- "We plough the fields, and scatter
- The good seed on the land,
- But it is fed and watered
- By God's almighty hand".
The Government are altering the meaning of our songs and our sayings. No longer will we be able to say, "He spends money like water" when describing a spendthrift. That description will have exactly the opposite meaning. It will be the description of a Scrooge-like person with mean thoughts; in other words, someone like the Secretary of State for the Environment. There is one saying that brings together what the Government are about with water privatisation and with every piece of legislation that they have introduced. The Governmentknows the price of everything and the value of nothing.
§ Mr. Ian Gow (Eastbourne)
There is no need for the House to wonder what you were doing at this time last evening, Madam Deputy Speaker. You were then, as you are now, presiding over our affairs. I begin by commending to the House some of the words that you used from the Chair last evening. You said:The hon. Member for Antrim, South (Mr. Forsythe) is perfectly in order to speak on the Bill. He is an hon. Member of this House."—[Official Report,7 December 1988; Vol. 143, c. 389.]At the beginning of the afternoon it seemed to be very much a debate for Welsh Members. I wondered whether I would be disqualified by reason of the fact that I am a Scotsman who represents an English constituency. The debate was begun this afternoon by my hon. Friend the Minister of State, Welsh Office, whose remarks were taken up by the shadow Secretary of State for Wales, the hon. Member for Alyn and Deeside (Mr. Jones). It is a day on which Members of the United Kingdom Parliament are entitled to speak, and that includes those who come from Scotland, to which the Bill relates only in small part, and including, as you reminded us, Madam Deputy Speaker, those who come from Northern Ireland, to which the Bill applies not at all.
My hon. and learned Friend the Minister for Water and Planning will have reflected as he piloted the Local Government Finance Bill through the House, and as he starts piloting the Water Bill through the House, that the enormous benefits that he believes each measure will confer upon Her Majesty's subjects will be withheld deliberately from those who live in the part of the kingdom that is known as Northern Ireland. It is a matter of legitimate comment when debating the Bill's Second Reading that the benefits that it will bring are to be withheld from Northern Ireland. 513 I remember, Madam Deputy Speaker, as you will, the words of the Conservative party's general election manifesto. We have had a most agreeable debate and Opposition Members have made assertions, quite legitimately, that the Bill is unpopular. That is a proper claim to be made by Opposition Members. No one can say, however, that the introduction of the Bill was a surprise. Whatever legitimacy is conferred upon legislation that is introduced in a party manifesto—some may think it scant—it has certainly been conferred upon the Bill.
I shall refer to the words that were approved by my right hon. Friend the Secretary of State when the Cabinet came to give its final approval to the manifesto on which the Conservative party fought and won the last general election. The manifesto stated:The water supply and sewage functions of the water authorities will be transferred to the private sector.It was a clear sentence and a short one. It was shorter than many other sentences that appeared in the manifesto and was incapable of being misunderstood.
The Bill is even longer than the Bill that became the Local Government Finance Act 1988. Although the Bill takes up hundreds of pages and must be in two parts because it is so large, it is implementing precisely the undertaking given in the manifesto.
Nor has the proposal for the privatisation of the nine water authorities in England and the one in Wales been a hasty operation. It is nearly four years since the then Minister at the Department of the Environment informed the House that the Government were considering the privatisation of the water industry. There is even a precedent for what we are doing, to which reference has been made today.
Nearly 25 per cent. of our fellow countrymen derive their fresh water from water companies which are privately owned. Everyone knows that those water authorities are subject to a strict legislative framework. They are different from all other companies. However, those 28 or 29 companies have one thing in common with private sector companies that are not like water companies. They are genuinely, fully and completely owned by the private sector. They are subject to control and to special rules, but in terms of ownership the 29 water companies are privately owned.
Those who decided to invest in the private water companies, those who decided to subscribe to their loan stock or to their debentures, did so because they believed that they would get a proper rate of return on their investment. Opposition Members must realise that because the ownership of a water authority, or, as they will become, the ownership of a water company, is transferred from the public to the private sector there is no reason to believe that that change of ownership will mean that there is a commitment to lower standards or to standards necessarily better or worse than those that apply to the water authorities today.
I believe that there are significant advantages in transferring the water authorities out of public and into private ownership. By making the transfer there will be genuine public ownership of a kind that does not exist today. I mean no discourtesy to my hon. and learned Friend the Minister or to my right hon. Friend the Secretary of State for the Environment, but I believe that their ownership, for that in effect is what it is, of the nine 514 water authorities and the ownership of my right hon. Friend the Secretary of State for Wales of the one water authority in Wales is harmful to the proper provision of fresh water and the proper collection of foul water.
I thought that I might receive just a murmur of approval when I said that I had no confidence in the superior wisdom of my right hon. Friends and of my hon. and learned Friend. The House is aware that all the members of the nine water authorities are appointed either by my right hon. Friend the Secretary of State for the Environment or by my right hon. Friend the Minister of Agriculture, Fisheries and Food. Henceforth of course, after privatisation, that power of patronage, which has been one of the evil concomitants of nationalisation throughout the ages, will be removed, and not before time. My hon. and learned Friend and my hon. Friend the Economic Secretary to the Treasury, who is on the Treasury Bench now, are aware of that. They know that not one of the water authorities can embark on a programme of investment without the approval of the Treasury. They do not even need the consent of my hon. and learned Friend or of the Secretary of State.
§ Mr. Heffer
I am glad to hear that. The hon. Gentleman must be the only one who does.
If the hon. Gentleman is so much against the water authorities being under the control of the state—and I accept that there is an argument for that, although I do not agree with him on this matter—would it not have been better to hand back many of the authorities to the local authorities? For many years I served on a water authority. I was an elected representative of the water authority of the Liverpool city council. We were responsible for the water that came to Liverpool. We were responsible for water coming from north Wales, and it used to get blown up from time to time. If we want to end patronage, why not put control back into the hands of local authorities? Not that that is necessarily the right thing to do at the moment, but it is better than handing it to private individuals, who will only want to gain for themselves and not have the interests of the people as a whole at heart.
§ Mr. Gow
I do not have the hon. Gentleman's confidence in the ability of district councils to operate great enterprises.
I have received one of those messages which in this place it is wise to obey, namely, that other hon. Members want to speak. Therefore, having received that message, I shall obey it.
§ Mr. Alan W. Williams (Carmarthen)
I have listened intently to the speeches this evening, and I have read explanations in the newspapers over the past few weeks of the Government's proposals, but I have yet to find an argument that will persuade me that there is any validity in privatisation.
Under a private monopoly there will be no choice for the consumer. By definition, there will be no competition in the supply of water. Prices must rise, because privatised companies will want to make a profit. By how much prices 515 will rise remains a matter for speculation. However, when we consider the profits of British Telecom, 20 per cent. of whose turnover is profit, I can only see higher water prices.
The Government argue that privatisation somehow brings about efficiency. I cannot see any possible efficiency savings in Welsh Water. During the past 15 years it has experienced three reorganisations, and on each occasion it has cut staff. There is no fat left to cut in Welsh Water.
I welcome the National Rivers Authority. The unsatisfactory situation whereby water authorities are both poacher and gamekeeper has long existed. However, dividing those responsibilities would have been possible within the public sector.
I am worried that the NRA will not have the resources that it needs for the massive job that it has to do. Water pollution in Britain is a growing problem. In 1980–81 there were 11,467 incidents. Last year, 1987–88, there were 23,253—a doubling in the past seven years. That is the Government's record on water pollution. Last September we heard the Prime Minister championing environmental issues for the first time in 10 years, yet that is the Government's record—a doubling in the incidence of water pollution.
I hope that the NRA will be able to do something about that. Only 288 of those 23,000 cases resulted in prosecutions last year—barely 1 per cent. Industrial companies were responsible for 61 per cent. of those offences. In Wales, in 1986, two thirds of industrial discharges broke the law for more than one fifth of the time. This is an area of our life in which there is little law enforcement. Therefore, the NRA has a massive job on hand.
I hope that the Government will give the NRA the resources that it needs to tackle that job. I suspect that they will not. In the first place, the water companies will have an amnesty until 1992. Farmers have a non-statutory code of practice. Most important of all, neither individuals nor local authorities who are affected will be able to take water companies to court for such offences. Prosecutions will be left to the Secretary of State and the Director of Public Prosecutions. I fear that at the end of the day the NRA, which is a good concept in itself, will prove no tougher than the Police Complaints Authority.
We desperately need major environmental improvements. According to the EC drinking water directives on nitrates, aluminium, lead and so on, Britain's water has above the maximum permitted concentrations. The cost of cleaning up our water supply is estimated at £5 billion or £6 billion.
The problems of pollcyclic hydrocarbons, trichloroethylene and pesticides in the water have been referred to. Under the Government's legislation, toxic wastes can be dumped in Britain with little regulation, and it is only a matter of time before they too reach ground water, water courses and so on. The bills will amount to £10 billion or more.
We have also heard a good deal about sewerage and sewage treatment. Most of our sewers were built in the last century and are in a state of collapse and need major investment. Rivers are regularly polluted by 20 per cent. of our sewage treatment works. According to an article in The Observer last Sunday, if we tighten up, as we should, the regulations governing sewage treatment, 80 per cent. not 20 per cent. of our works will be breaking the law. 516 Again, massive investment is needed to improve those figures and renew our sewers. We are talking, not of £10 billion, but of £20 billion of capital investment.
A few weeks ago, in a television interview, the Minister talked about our water industry. He argued that £10 billion or £20 billion worth of investment could riot come from the public purse because the money was not there. What he was admitting was that, despite the Government's protestations on the environment, the water industry is not a high enough priority in their programme. That is what he was saying. The money is there. We have a Budget surplus to the tune of £10 billion this year and the funds could and should come from the public purse. I see no argument for privatisation. The money should have been made available and the Government's terrible neglect over the past 10 years has allowed the situation to deteriorate.
No argument has been made by the Government to support the Bill. At the end of the day I abide by public opinion, and it is clear that at least 80 per cent. of public opinion is against the Bill. Yesterday we had a full day's debate in the Welsh Grand Committee, where the Queen's Speech was voted down by 26 votes to 10. I promise the House that if only Welsh Members had voted according to their consciences, the result would have been 51 votes to 7. If the matter is put to the Welsh people, I am certain that 90 per cent. of them will not want to see Welsh Water privatised.
§ 9.5 pm
§ Mr. Keith Mans (Wyre)
I welcome public attention being concentrated on protecting the environment and, more specifically, the water industry. They have for many years been neglected topics, and the Government's measures have at least served to air them.
One of the Bill's chief advantages is that it will allow water companies in the private sector to borrow on the commercial market when and where they need to do so. That compares favourably with the situation that has existed for many years, during which time the majority of water authorities have been in the public sector.
I wish to repeat some of the points that were made in the Select Committee on the Environment report on rivers and estuaries. It is clear that one of the reasons why water standards have fallen over the last few years is the lack of investment for about the past two decades A good example is that when the Labour party came to power in 1964, the previous Conservative Government having invested £400 million annually on sewage disposal, the total almost immediately dropped below that figure. It rose again through the rest of the 1960s and early 1970s, but surprisingly it fell again from a peak in 1973–74 of £900 million, at 1985–86 prices, to £400 million by the end of that decade. Therefore, I regard with scepticism the remarks of Opposition Members about how successful investment in the public sector had been when Labour was in power. The evidence produced by the all-party Select Committee suggests otherwise. Since 1981 investment has continued to rise, and I am convinced that it will continue to do so in the private sector.
As to the National Rivers Authority, one of the chief advantages of moving water companies into the private sector is that a regulatory device will remain in the public sector. I have no doubt that the NRA will be much better at regulating and controlling water companies than has been the case under the present arrangement, whereby 517 responsibility for ensuring water purity has been split between water authorities and the pollution inspectorate. It was a pity that in 1974 the old alkali inspectorate, which had a lot of authority in the water industry and did a good job, was altered by the new Labour Government when they assumed office. Many of the problems surrounding degenerating water standards had their beginnings in that Labour initiative, whereby the pollution inspectorate assumed greater responsibility.
I am convinced that the increase in investment that has taken place over the past two or three years will continue when the companies are put into the private sector. I am equally convinced that to have the National Rivers Authority and the Director General of Water Services looking after the interests of the consumer and making certain that pollution is reduced in our rivers in the public sector will be a far better way to look after water in this country. I shall support the Bill tonight.
§ Mrs. Ann Taylor (Dewsbury)
I do not want to take up all the points made by the hon. Member for Wyre (Mr. Mans), but we have checked the figures for capital expenditure of water authorities under Labour and Conservative Governments. It is a simple fact, on the Library's own figures, that capital expenditure between 1974 and 1975 averaged £1,254 million a year and in the period from 1979 to 1987–88, the last year for which figures are available, it averaged £922 million a year. Those are the figures that the Library provided today.
§ Mrs. Taylor
If the hon. Gentleman chooses to be selective in that way, he should compare his figures with the overall figures for investment during that period.
We have had a two-day debate on the Bill, but even that has not been sufficient to explore all the anxieties of hon. Members and those of many groups outside the House examining the Bill. It has been a strange feature of the debate that the worries that were expressed by a wide range of bodies outside the House have been ignored by Conservative Members, despite the fact that many of the members of those groups live in rural areas that are represented by Conservative Members. Who would have thought that only Opposition Members would be prepared to voice the concerns of the Council for the Protection of Rural England, the Royal Society for the Protection of Birds, fish farmers, the Royal Society of Nature Conservation and even, in some circumstances, the National Farmers Union. No doubt the Whips have been hard at work to silence wets who are worried about water, but I warn the Government that they cannot ignore those fears and anxieties indefinitely. Seventy-five per cent. of public opinion is against the Bill and Tory Members will be under increasing pressure on the Bill. I hope that those Conservative Members who have expressed reservations in private will soon speak out publicly against the Bill.
We should be clear at the outset about the Bill's intentions. The Secretary of State for the Environment, who is absent from the House at the moment, gave us his reasons for the Bill yesterday. He pointed out that the Bill creates the National Rivers Authority and a statutory 518 framework for setting river quality objectives and for updating sewerage law. All of that could have been done —and should have been done—without any proposal for privatisation. Clearly these provisions are in the Bill to try to make the sale of the water industry more acceptable to those groups who forced the Government to back down in 1986. Although they may favour the National Rivers Authority, they are not converted to the overall objectives of the Bill. If the Government are serious about independent controls—and we shall find that out when we try to strengthen the NRA in Committee—they could have introduced the provisions in a separate Bill before now and such a Bill would have gone through the House relatively quickly, with assistance from the Opposition.
The Secretary of State for the Environment claimed again yesterday that in establishing the NRA he was responding to the Select Committee's recommendation that gamekeepers should not be poachers as well. If the Secretary of State is serious about that, why is he allowing and encouraging the National Rivers Authority's regulatory functions to be contracted out—often back to the water plcs, the very bodies that the NRA will be regulating? If the gamekeeper should not be a poacher as well, why should the gamekeeper be forced to contract out his policing role to the poachers? That is what the Minister of State admitted will happen in an interview that was published this morning in the Surveyor.
One of our main concerns about the Bill is its impact on the consumer. Too often, the consumer gets a raw deal —literally so in some areas, including the Secretary of State's constituency where excreta has been found in the water supply. The Secretary of State's constituency faces other problems, too. The amount of aluminium in the water supply in his constituency exceeds the EEC directive level. Hon. Members will be aware, as I am sure the Secretary of State is aware, of the link between aluminium and senile dementia, which is of concern to everybody. That may explain the Secretary of State's absence. The Minister may deal with that point later.
§ The Minister for Water and Planning (Mr. Michael Howard)
The hon. Lady knows perfectly well—it was explained in advance to the Opposition Front Bench—that my right hon. Friend had to attend an official function this evening. The hon. Member for Copeland (Dr. Cunningham) knows that full well. It was known long before the date for this debate was fixed.
§ Mrs. Taylor
My hon. Friend the Member for Copeland (Dr. Cunningham) has confirmed to me that he knew that, but I think that it demonstrates the Secretary of State's priorities.
§ Mr. Howard
It was agreed by the Opposition Front Bench that, in all the circumstances, my right hon. Friend's absence would be acceptable. The hon. Member for Copeland nods his assent. It is utterly disgraceful that the hon. Lady, after such an assurance, should make that point in that way.
§ Mrs. Taylor
I remind the House that the Secretary of State for Wales was also absent during the opening speeches of today's debate.
We saw another example of the Secretary of State's priorities when he introduced the Bill yesterday. The consumer was at the bottom of the Secretary of State's list of reasons for the Bill. The consumer hardly rated a 519 mention in his speech. I am not surprised that the consumer came at the bottom of the Secretary of State's list because, in a way, he was being honest. Privatisation is not designed to protect the interests of the consumer, so it is not surprising that little regard is paid in the Bill to their interests.
The Bill provides for regional advisory committees to be appointed by the National Rivers Authority. I hope that the Minister will assure us that the committees will include consumers and representatives from established environmental and conservation groups.
The Minister of State, Welsh Office, boasted at the beginning of today's debate that the Bill provides for customer services committees. He is proud of that. He is satisfied with that protection. We are not. That provision does not satisfy us, nor does it satisfy those groups outside the House who are concerned about the interests of the consumer. The National Consumer Council says that the national river committees and the customer services committees will be neither independent nor sufficiently financed. The provision for customer services committees is laughable.
The Bill states that customer service committees "may" —not will—be established. If they are established, there is no guarantee that customers will be represented on them; certainly not ordinary domestic customers. The Bill states that such committees should be made up of those with experience of the industry. They could be packed with business men with their own vested interests. Even if those committees are established, and even if ordinary domestic consumers get a few places on them, there is no provision that they must be consulted. As the Bill stands, the new water companies will be under no obligation to consult the consumers of their industry. We shall seek to amend that.
The other area of concern for consumers is prices. There has already been a sign of what the consumer will face because statutory water companies have been advised to increase their prices to the maximum. The Secretary of State claimed yesterday that those price increases were for investment. That is simply not true. They are intended to fatten the reserves and, more importantly, to ensure that the base line for the calculation of prices, post-privatisation, will be as high as possible.
There are other signs of more to come, and the message is always the same—maximise the cost to the consumer to ensure maximum return to the investor. We should not be surprised at that—after all, that is what private investors expect of their companies. The British Business School, which is not exactly a Labour party organisation, has identified three groups of people who have benefited from privatisation. The first is the short-term speculator, who has bought into the industries for a quick profit derived from the undervaluing of shares. The taxpayer is cheated to ensure benefit for short-term speculators.
The second group is the City, which has benefited from the costs of flotation. Figures from Price Waterhouse show that the City has gained more than £660 million in fees alone, with more to come. The third group—the only other group to benefit from privatisation—comprises the top managers in the industries concerned, who have gained average pay increases of 78 per cent. in the first year of privatisation. Those who know about the industry have been bought off with promises of increased salaries, and all of those costs have to be met by the consumer.
The consumer might not mind paying more, within reason, for quality or for environmental improvements 520 —but there are no guarantees in the Bill that such improvements will take place. The Bill gives the Secretary of State many powers. For example, clause 98 states that the Secretary of State may establish water quality standards. Clause 104 states that he may establish water protection zones. Only yesterday he said that that power would belong to the National Rivers Authority. Will the Minister tell us whether that will be one of the first amendments to the Bill? Was the Secretary of State giving that power to the NRA? Under the Bill, it belongs to the Secretary of State. Clause 108 states that the Secretary of State may establish codes of agricultural practice.
What do those and other provisions really mean? They mean that the Secretary of State has the power to introduce stringent controls—but they also mean that he has the power not to introduce stringent controls. If this Secretary of State has a choice between introducing stringent environmental controls and protecting the profit of private water companies, I know which he will choose.
That is only one of the choices facing the Minister. The other choice relates to the arrangements for the sale of the industry and the price that will be fixed. The Secretary of State has not yet told us what he intends to do about the debts of the water industry. Does he intend to write off all or a proportion of those debts at massive cost to the taxpayer? It is important that we know that if we are to know who will buy the industry, and why.
If we compare the —5.2 billion debts of the industry with the profits, it is difficult to see where there is any incentive to invest. Will people queue up to invest in the sewers of Greater Manchester? Of course not, even though some of the most expensive functions will he transferred to the NRA to be funded by the taxpayer.
§ Mrs. Taylor
I think that we all know whether the brass is due to go under this provision.
We have a water industry which is run on commercial lines with the water authorities run by Tory appointees, all of whom are committed to the commercial approach. The only commercial improvement from privatisation mentioned by the Minister is access to loans on the private market, although the Chancellor of the Exchequer has said that the water authorities could not borrow more cheaply in the market than they do from the Government. That was before the increase in interest rates which have reached their current ridiculous height.
Let us get to the real reason why investors will be buying into this industry. We all know why people will be looking at the water industry. It is because the total assets of the water authorities are so great that even they cannot quantify them. The private sector would simply like to get its hands on them. There are half a million acres of land, some of it in prime sites in London and other major cities and much of it in areas of outstanding natural beauty. There are examples in every region. The Secretary of State and the Minister of State say that we should not worry about what will happen to the land because we should rely on planning controls. Anyone who knows anything about what has happened to planning procedures knows that time after time under this Government the developer wins.
More serious than that perhaps is the fact that water companies will have a large degree of control over the infrastructure necessary for future development. By laying 521 new water mains, increasing the size of water mains and providing new sewers, they can increase the value of land dramatically and then sell it. Or the conglomerates that might take over the water industry can allow their subsidiaries to reap the benefit of development.
Before Conservative Members with construction interests become too excited about the backdoor means to development opportunities, they should be aware that the French are already one step ahead. They are buying into statutory water companies, not because they are happy with the regulated return allowed—they are not investing so much money for the 1 per cent. yield that they have so far received—but because they know of the opportunities for the future.
The Secretary of State told us yesterday that the French would be able to teach the British water authorities a lesson—how helpful they would be. He almost welcomed their presence because they would be able to teach the water authorities how to diversify and provide cable television. Perhaps the chairman of Thames Water would like to diversify into cable television. However, consumers would prefer to have water companies that concentrate on providing a good water service.
The French are buying into our water companies not just in order to have a base for profit out of water management—although they will happily accept that—but mainly to have a base for future asset stripping and to use the infrastructure power of the new companies to give work to their own construction subsidiaries. They are already operating in this way in many other parts of Europe. As the Secretary of State said, French companies have diversified. However, he did not tell us about all the ways in which they have done so. Many French water companies are already providing theme parks. Conservative Members may think that that is what is needed in the Lake District or in the Peak park or the Brecon Beacons, but we do not think so and I do not think that the general public want that either.
There are other and perhaps more ominous overtones to the French history of diversification. Not only have French water companies diversified into construction companies and theme parks, but some have diversified into funeral undertakings. I shall not make the obvious comment about the link between that and the possible future quality of water, but it is rather alarming to hear that the funeral company subsidiary of Lyonnaise des Eaux has just decided to pay its employees on the payment-by-result method.
We do not want French conglomerates running our water industry, nor do we want to be run by British conglomerates. Britain needs a publicly-owned water industry that is properly resourced and properly accountable. The Prime Minister is keen to emulate the Victorians, and I would have thought that the Secretary of State, if he were here, would do likewise. The Victorians concluded that the aims of private enterprise and the need for a clean and plentiful water supply were incompatible. In 1894 Joseph Chamberlain said:It is difficult and indeed almost impossible to reconcile the rights and interests of the public to the claims of an individual company seeking as its natural and legitimate object the largest private gain.Yesterday the Government made it clear that the real object of the Bill was not to protect the environment but 522 to create viable and profitable companies. We seem to have learnt nothing in the 94 years since Joseph Chamberlain made his comment because we are contemplating whether we should again subject the country's water needs to market and competition forces. All those years ago even the Conservatives realised that the water industry was not safe in private hands. Who are the extremists now? I ask the House to vote against Second Reading.
§ The Minister for Water and Planning (Mr. Michael Howard)
The debate has lasted for almost 10 hours and detailed points have been raised to which I shall shortly reply. The most conspicuous feature of the long debate is the utter intellectual bankruptcy of the Opposition. Hour after hour Conservative Members have waited for some coherent explanation of the Opposition's attitude. We have waited patiently, we have waited attentively and we have waited in vain.
The Labour party is the "Say no" party. It says no to change, to new ideas and to any constructive proposals designed to improve the condition of our people. The Labour party is the most sterile, destructive and negative Opposition that we have seen for generations. At no time have those characteristics been more apparent than in the past 10 hours of debate.
Yesterday, we had from the hon. Member for Copeland (Dr. Cunningham) the routine rant that we have come to expect from him. He railed about the evils of the private sector. But until my right hon. Friend the Secretary of State intervened, he said nothing about the private sector water companies which presently supply one quarter of our drinking water, as we were reminded by my hon. Friend the Member for Eastbourne (Mr. Gow) in his elegant speech.
It is, of course, hardly surprising that the hon. Member for Copeland should be rather wary about the private water companies. If the private sector is the menace to standards in the water industry that the hon. Gentleman suggested, why were they not taken into public ownership under any of the Labour Governments who have existed since the war?
The hon. Gentleman has no answer to that. He prefers to forget that the private companies exist. He does not even know what they do. He suggested yesterday that they were not private enterprises, and that they simply act as agents for the regional water authorities.
That is an astonishing statement for the hon. Gentleman to have made. It will not, of course, come as a surprise to my right hon. and hon. Friends, who know from long experience not to expect Opposition spokesmen to have any acquaintance with the facts or with the real world. But it came as a considerable surprise to the companies themselves which have a long and distinguished history of supplying drinking water in the private sector quite independently of the regional water authorities.
Then the hon. Gentleman railed about price increases.
§ Mrs. Ann Taylor
Before the Minister leaves the subject of private water companies, if he will not accept the word of my hon. Friend the Member for Copeland (Dr. Cunningham), will he accept the words of Jack Jeffrey, who was chair of the Water Companies Association, who remarked: 523We are subject to strict financial controls, especially on dividends, which make us very different from the water plcs which are being proposed by the Government."?
§ Mr. Howard
I do not know what point the hon. Lady is addressing, but it is not the point made by the hon. Member for Copeland. The hon. Gentleman said that they were not private enterprise companies, and he was wrong. He said that they acted only as agents of the regional water authorities, and he was wrong about that, too.
The hon. Gentleman railed about price increases. My right hon. Friend the Secretary of State dealt with that point in his speech yesterday. But what of the increase in the price of water of 42 per cent. in 1975–76? Did the hon. Gentleman not notice it at the time? Had he forgotten it?
Last, but very far from least, the hon. Gentleman had the temerity to criticise the condition of our rivers and beaches. The hon. Gentleman knows very well that the main cause of our present problems lies in the record of the Labour Government—[Interruption.] The convolutions in which the hon. Gentleman engaged in a vain attempt to defend the indefensible were astonishing. The first thing the hon. Gentleman did yesterday, when he sought to explain the Labour Government's record, was to succumb to a bout of amnesia about the last year of office of the Labour Government. He tried to pretend that the last year of the Labour Government was 1977–78. It is in Hansard for all to see. I think we can all sympathise with the hon. Gentleman's desire to expunge from the record all trace of the year 1978–79 or, failing that, to hope that we will forget that Labour was in office during that disastrous year. But the hon. Gentlman will have to be just a little more sophisticated if he is to have much success in that endeavour.
The hon. Gentleman was then faced with the decision of which deflator to use to bend the figures to his case. Should he use the GDP deflator or the public works deflator? He decided to use them both—one for one set of figures and the other for an entirely different set of figures. But that did not work either. The length to which the hon. Gentleman went to try to find some figures that he thought he could use illustrates better than anything the hollow weakness of the case that he was trying to defend.
§ Dr. John Cunningham (Copeland)
I should be flattered that, in his speech, the hon. and learned Gentleman has referred only to my own speech. I take that as a compliment. As he and the Secretary of State find it difficult to face the truth, I say to him again that they are not my figures; they are the figures published in "Water Facts", and the statistics were calculated by the House of Commons Library. The hon. and learned Gentleman is trying to suggest that somehow Opposition Members have manipulated the figures. That is a manifest dishonesty.
§ Mr. Howard
Perhaps the hon. Gentleman will tell the House whether he depends on the House Library to tell him what was the final year of the last Labour Government. That was just one of the things that he got wrong.
§ Mr. Howard
No, I shall not give way—[Interruption.] I shall refer directly to the hon. Lady. We have just heard the hon. Lady's maiden Front-Bench speech on this 524 subject. I welcome her to her new responsibilities. She has certainly made an enthusiastic start, but, unfortunately—
§ Mr. Howard
I shall give way to the hon. Lady in a moment.
Unfortunately, in her desire to make an enthusiastic start, the hon. Lady has let her enthusiasm run away with her. On Monday, for example, the hon. Lady issued a press release. It was a mixture of mistakes, muddle and misrepresentation.
I shall confine myself to one example. The hon. Lady alleged that, after privatisation, the water industry would not be able to spend money on protecting the environment because, for the first time, it would have to pay local authority rates. I shall quote the exact words that she used.It is also likely"—the hon. Lady said—that while the industry in public hands did not have to pay local authority rates, the private industry will.There is just one difficulty about that. The industry in public hands has been paying local authority rates. There will be no change after privatisation. The hon. Lady got that simple, elementary fact utterly and completely wrong.
§ Mr. Howard
I shall give way to the hon. Lady if she wishes, but I hope that, on this occasion, she will not blame the House Library for that mistake.
§ Mrs. Taylor
They do not pay rates, but they will after privatisation.
Perhaps I may refer to the figures for investment in the last year of the Labour Government. The hon. and learned Gentleman was challenging our figures. I shall tell him about investment in water authorities in the last year of the Labour Government, 1978–79. Would the hon. and learned Gentleman prefer the figures for 1977–78? I shall give both. In 1977–78, investment in water authorities was £1,066 million. In 1978–79, it was £1,013 million. Investment did not reach either of those figures under a Conservative Government until 1987–88.
§ Mr. Howard
We know what the figures show because we heard the speech yesterday—I shall return to it in due course—by the Chairman of the Select Committee on the Environment. That Committee reported, in terms which were supported and signed by the hon. Member for Bootle (Mr. Roberts), that, under the Labour Government, investment by the industry fell by one third in real terms and in sewerage by a half. Those are the facts of the matter.
Following the press release by the hon. Member for Dewsbury (Mrs. Taylor) on Monday, which contained such an elementary mistake, I should like to make an offer to the hon. Lady. I want the debates in which she and I will be engaged in the next few months to be conducted on a sensible basis. I want to help the hon. Lady to get her facts right. If she sends a copy of her press releases to the Department of the Environment in advance, I shall make sure that the facts are properly checked and that she does not in future make the kind of mistake that she made on Monday.
The Bill represents a giant step forward towards a better water environment. It is about the quality of the water that we drink, the purity of our rivers and the 525 cleanliness of our beaches. It is the key to those higher environmental standards of which others speak, but which we deliver.
Of course, the measures in the Bill will secure for our people all the advantages that any privatisation brings—the advantages that have led so many other countries, governed by parties of many different political persuasions, to emulate our example. It will contribute to the spread of share ownership, it will give employees a real stake in their companies, and it will remove from this important segment of our economy the public sector shroud which conceals and disguises true accountability. It will open up for the industry all the opportunities and incentives for increased efficiency that only the private sector can provide, and it will free the industry from the constraints of competition for limited public sector resources with schools, hospitals, defence and all the other demands which must continue to be met by the taxpayer.
It is that access to private sector capital which will, above all, enable higher environmental standards to be achieved. The hon. Member for Bootle suggested yesterday that we could somehow abolish all spending restraint while retaining the industry in the public sector. It would be interesting to know whether he had consulted his party's economic spokesmen before making that statement.
§ Mr. Allan Roberts
Will the Minister explain how funds for river navigation, flood defences, sea defences and all the other major environmental concerns, which now rest with the water industry, but which will be given to the National Rivers Authority, will be released from the public sector borrowing requirement if they stay in the public sector? How will they be funded?
§ Mr. Howard
They will be funded from the public sector. The reason for that is very simple—so simple that it has escaped the hon. Gentleman. The amounts to fund those activities are very much smaller than the amounts needed to finance the investment of the authorities themselves. If the step suggested by the hon. Gentleman yesterday was such an obvious and easy step to take, why was it not taken between 1974 and 1979 by the Labour Government, who presided over a cut in investment of one third overall and one half in sewerage services?
It is, of course, true that the industry is a natural monopoly. We recognise that, but that does not mean that there will be no scope for competition. There will be competition between the various privatised concerns in the capital markets, there will be competition over supply to "inset areas" and there will be competition in the provision of various commercial interests.
There will be the yardstick of competition between the companies themselves which will enable the Director General of Water Services, in setting the price at which the companies will be permitted to sell their water, to ensure that consumers benefit from improved efficiency. We are determined to ensure that the customer gets these benefits not only in the price that he pays for water but in the quality of service that he receives. Customers will be protected by enforcing the conditions of appointment of the companies, and there will be new customer service committees with a balanced membership representing consumer interests.
526 The Bill also provides for regulations to be made for a guaranteed standards scheme. These guarantees will cover such matters as resumption of water supplies after a supply failure or planned disconnection, prompt response to billing inquiries or reasonable written complaints and keeping appointments at the agreed time.
My hon. Friend the Member for Stockton, South (Mr. Devlin) referred to the need for automatic payments to be made to domestic customers if guaranteed standards are not met. We agree, and I am happy to be able to announce that there will be such a scheme providing compensation for a breach of guaranteed standards. We envisage a payment of around £5 for each and every day, or for each and every occasion, as appropriate, on which a breach occurs. This would be a no-nonsense, no-quibble scheme to provide a spur to management for good commercial manners and quick recompense to customers for the inconvenience that they have suffered. It will be a new remedy for the customer. It will be in addition to existing legal rights. It will be but one of the many advantages that will accrue to the customer as a result of privatisation.
If there has been a focus for the contributions to this debate, it has related to the environmental aspect of our proposals. That is as it should be, because concern for the protection and enhancement of our water environment lies at the heart of the Bill. It was my right hon. Friend the Secretary of State who last year saw the need to separate the regulatory functions of the water authorities from their water supply functions. Even Labour Members have been grudgingly obliged to concede the merits of the National Rivers Authority. The advisory committee, under the distinguished chairmanship of my right hon. and noble Friend Lord Crickhowell, has made an excellent start in identifying its responsibilities and putting in place the organisational framework within which these responsibilities will be discharged.
My hon. Friends the Members for Devizes (Sir C. Morrison) and for Pudsey (Sir G. Shaw) expressed concern about the resources available for the NRA. They were right to say that, unless it gets the resources it needs, it will not succeed. We accept that. We are determined to ensure that it gets these resources and that it will succeed. That is the basis on which it is being established.
My hon. Friend the Member for Cornwall, North (Mr. Neale), who has taken such a close interest on behalf of his constituents in recent events in his constituency, asked for a specific assurance that the Department will continue to monitor closely what is happening in his constituency. I am happy to give him that assurance. My hon. Friend the Member for Dorset, North (Mr. Baker) asked for a reassurance that the full rigours of the planning system would be maintained after privatisation, and I am happy to give my hon. Friend that assurance.
My right hon. Friend the Member for Woking (Mr. Onslow) suggested that the regional fisheries advisory committees of the NRA should have the same executive responsibilities as the regional flood defence committees as anglers would contribute a great deal to the funds of the NRA. The answer to my right hon. Friend's worry is that matters will continue as they have. The regional flood defence committee will continue to exercise the executive functions that are now exercised by the land drainage committees, and the regional fisheries advisory committees will continue as advisory committees to the new authority.
My right hon. Friend the Secretary of State has explained how we see this measure as the key to improved 527 environmental standards, but we should not allow the false picture of the present state of our water environment so sedulously painted by Labour Members to gain acceptance. They lost no opportunity to denigrate the state of our environment, but their charges, in this as in so many other cases, are very wide of the mark. They say that we have the dirtiest rivers in Europe. They are wrong. We have the highest standards of river quality in the European Community, with the exception of the Irish Republic and possibly Holland. They say that we have the dirtiest beaches in Europe, but they are wrong. We are making steady progress in cleaning our beaches. We are the only member of the European Community that has drawn up a clear and defined table and programme for securing compliance with the European bathing water directive.
§ Mr. Paul Boateng (Brent, South)
The hon. and learned Gentleman is going at a fine old lick, but could we have some intellectual content?
§ Mr. Howard
If the hon. Gentleman is not interested in the state of our rivers or beaches, he is typical of the general attitude of the Opposition. I am dealing with the facts.
§ Dr. Cunningham
As the Minister of State unusually is dealing with facts, perhaps he can deal with this one. If what he says about our position in Europe is true, why have we been singled out by the European Commission for more prosecutions in respect of drinking water quality and bathing water quality than all the other member states put together?
§ Mr. Howard
That is not right either. That is another of the hon. Gentleman's errors. That is as wide of the mark as any of the other charges that the hon. Gentleman delights in peddling. The fact is that we are making substantial progress in improving our water environment and have reached far higher standards than most of the other countries in Europe.
I shall give the hon. Member for Copeland some more facts. We have more of our households connected to a main sewerage system than has any other country in Europe. We have more of our sewage treated before disposal than has any other country in Europe. We have no need whatever to be ashamed of our record.
However, I want to come to the record of the Opposition. It was identified in the clearest possible terms in the report of the Select Committee, chaired by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), and supported and signed by the hon. Member for Bootle, who was a member of the Committee. The Committee said:There are a number of reasons why water authority effluents fall short of the present consent standards. The most immediate reason is because from the mid-1970s until the early 1980s there was a steady drop in investment by the water authorities in sewerage and sewage disposal.
The undisputed facts are that, when the Opposition were in power, investment by the water authorities fell by one third and investment in sewerage and sewage disposal fell by one half. Those are the facts. The Opposition like to convey the impression that those events took place in a far-off distant period of which they know nothing, but many of them were here. The hon. Member for Dewsbury was a Member of the House, albeit for a different constituency. Perhaps she would like to remind the House of the occasions when she rose during those years to 528 protest against those cuts and against the damage to the environment that they caused. The hon. Member for Copeland was here, too.
§ Mrs. Taylor
Before the Minister gets carried away, perhaps he would reflect on what he was not happy to discuss earlier: the actual levels of investment under a Labour Government compared with the actual levels of investment under a Conservative Government. The average level of investment under the last Labour Government between 1974 and 1979 was £1,254 million per year. The average investment under the Conservative Government has been £922 million per year. In no year since 1978–79 has investment under the Conservative Government reached the level of investment under the Labour Government. For the Minister to suggest that the problems faced by this industry today are the responsibility of the Labour Government is to ignore the fact that this Government have been in office for 10 of the last 14 years and that they have been—[Interruption.]
§ The Parliamentary Secretary to the Treasury (Mr. David Waddington)
rose in his place and claimed to move. That the Question be now put.
§ Question, That the Question be now put, put and agreed to.
§ Question put accordingly, That the Bill be now read a Second time:—
§ The House divided: Ayes 301, Noes 241.532
|Divison No. 11]||[9.59 pm|
|Alexander, Richard||Clarke, Rt Hon K. (Rushcliffe)|
|Amery, Rt Hon Julian||Conway, Derek|
|Arbuthnot, James||Coombs, Anthony (Wyre F'rest)|
|Arnold, Jacques (Gravesham)||Coombs, Simon (Swindon)|
|Arnold, Tom (Hazel Grove)||Cope, Rt Hon John|
|Ashby, David||Cormack, Patrick|
|Baker, Nicholas (Dorset N)||Couchman, James|
|Baldry, Tony||Cran, James|
|Banks, Robert (Harrogate)||Currie, Mrs Edwina|
|Bellingham, Henry||Davies, Q. (Stamf'd & Spald'g)|
|Bottomley, Peter||Davis, David (Boothferry)|
|Bowden, Gerald (Dulwich)||Day, Stephen|
|Bowis, John||Devlin, Tim|
|Braine, Rt Hon Sir Bernard||Dicks, Terry|
|Brandon-Bravo, Martin||Dorrell, Stephen|
|Bright, Graham||Douglas-Hamilton, Lord James|
|Brooke, Rt Hon Peter||Dover, Den|
|Brown, Michael (Brigg & Cl't's)||Dunn, Bob|
|Bruce, Ian (Dorset South)||Durant, Tony|
|Buck, Sir Antony||Dykes, Hugh|
|Budgen, Nicholas||Emery, Sir Peter|
|Burns, Simon||Evans, David (Welwyn Hatf'd)|
|Burt, Alistair||Evennett, David|
|Butcher, John||Fallon, Michael|
|Butler, Chris||Favell, Tony|
|Butterfill, John||Field, Barry (Isle of Wight)|
|Carlisle, John, (Luton N)||Fookes, Miss Janet|
|Carrington, Matthew||Forman, Nigel|
|Carttiss, Michael||Forsyth, Michael (Stirling)|
|Cash, William||Forth, Eric|
|Chalker, Rt Hon Mrs Lynda||Fowler, Rt Hon Norman|
|Chapman, Sydney||Fox, Sir Marcus|
|Chope, Christopher||Franks, Cecil|
|Churchill, Mr||Freeman, Roger|
|Clark, Hon Alan (Plym'th S'n)||French, Douglas|
|Clark, Dr Michael (Rochford)||Fry, Peter|
|Clark, Sir W. (Croydon S)||Gale, Roger|
|Gardiner, George||Luce, Rt Hon Richard|
|Garel-Jones, Tristan||Lyell, Sir Nicholas|
|Gill, Christopher||McCrindle, Robert|
|Glyn, Dr Alan||Macfarlane, Sir Neil|
|Goodhart, Sir Philip||MacKay, Andrew (E Berkshire)|
|Goodlad, Alastair||Maclean, David|
|Goodson-Wickes, Dr Charles||McLoughlin, Patrick|
|Gorman, Mrs Teresa||McNair-Wilson, Sir Michael|
|Gorst, John||McNair-Wilson, P. (New Forest)|
|Gow, Ian||Madel, David|
|Gower, Sir Raymond||Major, Rt Hon John|
|Grant, Sir Anthony (CambsSW)||Malins, Humfrey|
|Greenway, Harry (Ealing N)||Mans, Keith|
|Greenway, John (Ryedale)||Maples, John|
|Gregory, Conal||Marland, Paul|
|Griffiths, Peter (Portsmouth N)||Marlow, Tony|
|Grist, Ian||Marshall, John (Hendon S)|
|Ground, Patrick||Marshall, Michael (Arundel)|
|Grylls, Michael||Martin, David (Portsmouth S)|
|Gummer, Rt Hon John Selwyn||Mates, Michael|
|Hamilton, Neil (Tatton)||Maude, Hon Francis|
|Hampson, Dr Keith||Mawhinney, Dr Brian|
|Hanley, Jeremy||Mayhew, Rt Hon Sir Patrick|
|Hannam, John||Mellor, David|
|Hargreaves, A. (B'ham H'll Gr')||Miller, Sir Hal|
|Hargreaves, Ken (Hyndburn)||Mills, Iain|
|Harris, David||Miscampbell, Norman|
|Haselhurst, Alan||Mitchell, Andrew (Gedling)|
|Hayhoe, Rt Hon Sir Barney||Mitchell, Sir David|
|Hayward, Robert||Moate, Roger|
|Heathcoat-Amory, David||Monro, Sir Hector|
|Heddle, John||Montgomery, Sir Fergus|
|Heseltine, Rt Hon Michael||Moore, Rt Hon John|
|Hicks, Mrs Maureen (Wolv' NE)||Morris, M (N'hampton S)|
|Hicks, Robert (Cornwall SE)||Morrison, Sir Charles|
|Higgins, Rt Hon Terence L.||Moss, Malcolm|
|Hill, James||Moynihan, Hon Colin|
|Hind, Kenneth||Neale, Gerrard|
|Hogg, Hon Douglas (Gr'th'm)||Nelson, Anthony|
|Holt, Richard||Neubert, Michael|
|Hordern, Sir Peter||Newton, Rt Hon Tony|
|Howard, Michael||Nicholls, Patrick|
|Howarth, G. (Cannock & B'wd)||Nicholson, David (Taunton)|
|Howell, Rt Hon David (G'dford)||Nicholson, Emma (Devon West)|
|Howell, Ralph (North Norfolk)||Onslow, Rt Hon Cranley|
|Hughes, Robert G. (Harrow W)||Oppenheim, Phillip|
|Hunt, David (Wirral W)||Page, Richard|
|Hunter, Andrew||Paice, James|
|Irvine, Michael||Parkinson, Rt Hon Cecil|
|Irving, Charles||Patnick, Irvine|
|Jack, Michael||Patten, Chris (Bath)|
|Jackson, Robert||Patten, John (Oxford W)|
|Janman, Tim||Pattie, Rt Hon Sir Geoffrey|
|Jessel, Toby||Peacock, Mrs Elizabeth|
|Johnson Smith, Sir Geoffrey||Porter, David (Waveney)|
|Jones, Gwilym (Cardiff N)||Portillo, Michael|
|Jones, Robert B (Herts W)||Powell, William (Corby)|
|Jopling, Rt Hon Michael||Price, Sir David|
|Key, Robert||Raison, Rt Hon Timothy|
|King, Roger (B'ham N'thfield)||Redwood, John|
|King, Rt Hon Tom (Bridgwater)||Renton, Tim|
|Kirkhope, Timothy||Rhodes James, Robert|
|Knapman, Roger||Riddick, Graham|
|Knight, Greg (Derby North)||Ridley, Rt Hon Nicholas|
|Knight, Dame Jill (Edgbaston)||Ridsdale, Sir Julian|
|Knowles, Michael||Rifkind, Rt Hon Malcolm|
|Knox, David||Roberts, Wyn (Conwy)|
|Lamont, Rt Hon Norman||Roe, Mrs Marion|
|Lang, Ian||Rost, Peter|
|Latham, Michael||Rowe, Andrew|
|Lawrence, Ivan||Rumbold, Mrs Angela|
|Lawson, Rt Hon Nigel||Ryder, Richard|
|Lee, John (Pendle)||Sackville, Hon Tom|
|Lennox-Boyd, Hon Mark||Sainsbury, Hon Tom|
|Lester, Jim (Broxtowe)||Sayeed, Jonathan|
|Lightbown, David||Scott, Nicholas|
|Lilley, Peter||Shaw, David (Dover)|
|Lloyd, Sir Ian (Havant)||Shaw, Sir Giles (Pudsey)|
|Lloyd, Peter (Fareham)||Shaw, Sir Michael (Scarb')|
|Lord, Michael||Shelton, William (Streatham)|
|Shephard, Mrs G. (Norfolk SW)||Tredinnick, David|
|Shepherd, Colin (Hereford)||Trippier, David|
|Shersby, Michael||Trotter, Neville|
|Sims, Roger||Twinn, Dr Ian|
|Skeet, Sir Trevor||Vaughan, Sir Gerard|
|Smith, Tim (Beaconsfield)||Viggers, Peter|
|Soames, Hon Nicholas||Waddington, Rt Hon David|
|Speller, Tony||Wakeham, Rt Hon John|
|Spicer, Sir Jim (Dorset W)||Waldegrave, Hon William|
|Spicer, Michael (S Worcs)||Walden, George|
|Squire, Robin||Walker, Bill (T'side North)|
|Stanbrook, Ivor||Walker, Rt Hon P. (W'cester)|
|Stanley, Rt Hon Sir John||Waller, Gary|
|Steen, Anthony||Ward, John|
|Stern, Michael||Wardle, Charles (Bexhill)|
|Stevens, Lewis||Warren, Kenneth|
|Stewart, Allan (Eastwood)||Watts, John|
|Stewart, Andy (Sherwood)||Wells, Bowen|
|Stewart, Ian (Hertfordshire N)||Wheeler, John|
|Stradling Thomas, Sir John||Whitney, Ray|
|Sumberg, David||Widdecombe, Ann|
|Summerson, Hugo||Wiggin, Jerry|
|Tapsell, Sir Peter||Wilkinson, John|
|Taylor, John M (Solihull)||Wilshire, David|
|Taylor, Teddy (S'end E)||Winterton, Mrs Ann|
|Tebbit, Rt Hon Norman||Wolfson, Mark|
|Temple-Morris, Peter||Wood, Timothy|
|Thatcher, Rt Hon Margaret||Woodcock, Mike|
|Thompson, D. (Calder Valley)||Yeo, Tim|
|Thompson, Patrick (Norwich N)||Young, Sir George (Acton)|
|Thorne, Neil||Younger, Rt Hon George|
|Thurnham, Peter||Tellers for the Ayes:|
|Townend, John (Bridlington)||Mr. Alan Howarth and|
|Townsend, Cyril D. (B'heath)||Mr. Kenneth Carlisle.|
|Abbott, Ms Diane||Clarke, Tom (Monklands W)|
|Adams, Allen (Paisley N)||Clay, Bob|
|Allen, Graham||Clelland, David|
|Alton, David||Clwyd, Mrs Ann|
|Anderson, Donald||Cohen, Harry|
|Archer, Rt Hon Peter||Coleman, Donald|
|Armstrong, Hilary||Cook, Frank (Stockton N)|
|Ashdown, Paddy||Cook, Robin (Livingston)|
|Ashley, Rt Hon Jack||Corbett, Robin|
|Ashton, Joe||Corbyn, Jeremy|
|Banks, Tony (Newham NW)||Cousins, Jim|
|Barnes, Harry (Derbyshire NE)||Cox, Tom|
|Barnes, Mrs Rosie (Greenwich)||Crowther, Stan|
|Barron, Kevin||Cryer, Bob|
|Battle, John||Cummings, John|
|Beckett, Margaret||Cunliffe, Lawrence|
|Beith, A. J.||Cunningham, Dr John|
|Bell, Stuart||Dalyell, Tam|
|Benn, Rt Hon Tony||Darling, Alistair|
|Bennett, A. F. (D'nt'n & R'dish)||Davies, Rt Hon Denzil (Llanelli)|
|Bermingham, Gerald||Davies, Ron (Caerphilly)|
|Bidwell, Sydney||Davis, Terry (B'ham Hodge H'l)|
|Blair, Tony||Dewar, Donald|
|Blunkett, David||Dixon, Don|
|Boateng, Paul||Dobson, Frank|
|Boyes, Roland||Doran, Frank|
|Bradley, Keith||Douglas, Dick|
|Bray, Dr Jeremy||Duffy, A. E. P.|
|Brown, Gordon (D'mline E)||Dunnachie, Jimmy|
|Brown, Nicholas (Newcastle E)||Dunwoody, Hon Mrs Gwyneth|
|Brown, Ron (Edinburgh Leith)||Eadie, Alexander|
|Bruce, Malcolm (Gordon)||Eastham, Ken|
|Buchan, Norman||Evans, John (St Helens N)|
|Buckley, George J.||Ewing, Harry (Falkirk E)|
|Caborn, Richard||Fatchett, Derek|
|Callaghan, Jim||Fearn, Ronald|
|Campbell, Menzies (Fife NE)||Field, Frank (Birkenhead)|
|Campbell, Ron (Blyth Valley)||Field, Terry (L'pool B G'n)|
|Campbell-Savours, D. N.||Fisher, Mark|
|Canavan, Dennis||Flannery, Martin|
|Cartwright, John||Flynn, Paul|
|Clark, Dr David (S Shields)||Foot, Rt Hon Michael|
|Foster, Derek||Michael, Alun|
|Foulkes, George||Michie, Bill (Sheffield Heeley)|
|Fraser, John||Michie, Mrs Ray (Arg'l & Bute)|
|Fyfe, Maria||Mitchell, Austin (G't Grimsby)|
|Galbraith, Sam||Molyneaux, Rt Hon James|
|Galloway, George||Moonie, Dr Lewis|
|Garrett, John (Norwich South)||Morgan, Rhodri|
|Garrett, Ted (Wallsend)||Morley, Elliott|
|George, Bruce||Morris, Rt Hon A. (W'shawe)|
|Gilbert, Rt Hon Dr John||Morris, Rt Hon J. (Aberavon)|
|Godman, Dr Norman A.||Mowlam, Marjorie|
|Golding, Mrs Llin||Mullin, Chris|
|Gordon, Mildred||Murphy, Paul|
|Graham, Thomas||Nellist, Dave|
|Grant, Bernie (Tottenham)||Oakes, Rt Hon Gordon|
|Griffiths, Nigel (Edinburgh S)||O'Brien, William|
|Griffiths, Win (Bridgend)||O'Neill, Martin|
|Grocott, Bruce||Orme, Rt Hon Stanley|
|Hardy, Peter||Owen, Rt Hon Dr David|
|Healey, Rt Hon Denis||Paisley, Rev Ian|
|Heffer, Eric S.||Parry, Robert|
|Henderson, Doug||Patchett, Terry|
|Hinchliffe, David||Pendry, Tom|
|Hogg, N. (C'nauld & Kilsyth)||Pike, Peter L.|
|Holland, Stuart||Powell, Ray (Ogmore)|
|Home Robertson, John||Prescott, John|
|Hood, Jimmy||Primarolo, Dawn|
|Howarth, George (Knowsley N)||Quin, Ms Joyce|
|Howell, Rt Hon D. (S'heath)||Radice, Giles|
|Howells, Geraint||Randall, Stuart|
|Hoyle, Doug||Redmond, Martin|
|Hughes, John (Coventry NE)||Rees, Rt Hon Merlyn|
|Hughes, Robert (Aberdeen N)||Reid, Dr John|
|Hughes, Roy (Newport E)||Richardson, Jo|
|Hughes, Sean (Knowsley S)||Roberts, Allan (Bootle)|
|Hughes, Simon (Southwark)||Robertson, George|
|Illsley, Eric||Robinson, Geoffrey|
|Ingram, Adam||Rogers, Allan|
|Janner, Greville||Rooker, Jeff|
|John, Brynmor||Ross, Ernie (Dundee W)|
|Jones, Barry (Alyn & Deeside)||Rowlands, Ted|
|Jones, leuan (Ynys Môn)||Ruddock, Joan|
|Kaufman Rt Hon Gerald||Salmond, Alex|
|Kennedy, Charles||Sedgemore, Brian|
|Kinnock, Rt Hon Neil||Sheerman, Barry|
|Kirkwood, Archy||Sheldon, Rt Hon Robert|
|Lamond, James||Shore, Rt Hon Peter|
|Leadbitter, Ted||Short, Clare|
|Lestor, Joan (Eccles)||Skinner, Dennis|
|Lewis, Terry||Smith, Andrew (Oxford E)|
|Livingstone, Ken||Smith, C. (Isl'ton & F'bury)|
|Livsey, Richard||Snape, Peter|
|Lloyd, Tony (Stretford)||Soley, Clive|
|Lofthouse, Geoffrey||Spearing, Nigel|
|Loyden, Eddie||Steinberg, Gerry|
|McAllion, John||Stott, Roger|
|McAvoy, Thomas||Strang, Gavin|
|McCartney, Ian||Straw, Jack|
|Macdonald, Calum A.||Taylor, Mrs Ann (Dewsbury)|
|McFall, John||Taylor, Matthew (Truro)|
|McKay, Allen (Barnsley West)||Thomas, Dr Dafydd Elis|
|McKelvey, William||Thompson, Jack (Wansbeck)|
|McLeish, Henry||Turner, Dennis|
|Maclennan, Robert||Vaz, Keith|
|McNamara, Kevin||Wall, Pat|
|McTaggart, Bob||Wallace, Jemes|
|McWilliam, John||Walley, Joan|
|Madden, Max||Wardell, Gareth (Gower)|
|Mahon, Mrs Alice||Wareing, Robert N.|
|Marek, Dr John||Welsh, Andrew (Angus E)|
|Marshall, David (Shettleston)||Welsh, Michael (Doncaster N)|
|Marshall, Jim (Leicester S)||Wigley, Dafydd|
|Martin, Michael J. (Springburn)||Williams, Rt Hon Alan|
|Martlew, Eric||Williams, Alan W. (Carm'then)|
|Maxton, John||Wilson, Brian|
|Meacher, Michael||Winnick, David|
|Meale, Alan||Wise, Mrs Audrey|
|Worthington, Tony||Tellers for the Noes:|
|Wray, Jimmy||Mr. Frank Haynes and Mr. Martin Jones.|
|Young, David (Bolton SE)|
§ Question accordingly agreed to.
§ Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).