Water Privatisation (Hansard, 23 January 1989)

§ 2. Mr. Ray Powell
To ask the Secretary of State for Wales what assessment he has made of the impact of water privatisation on the environment of Wales and the health of the people of Wales.

§ Mr. Peter Walker
The establishment of the National Rivers Authority has been widely welcomed on environmental grounds. I am satisfied, too, that the proposed regulatory regime, under which the successor company to the Welsh water authority will operate, will provide adequate protection for the customer both in terms of quality of service and charges.

§ Mr. Powell
As a wet in the Cabinet, is the Secretary of State now drying out on the question of water privatisation, or has he been dangled a carrot by the Prime Minister, as a carrot was dangled to the chairman of the Welsh water authority by his predecessor to persuade him to change his mind about privatisation in one weekend? Has the right hon. Gentleman read in today's Independent an article by Jeremy Warner, which forecasts a 20 per cent. increase in water charges within the next few years—and that is before the investors get their greedy hands on our water? Over the past 10 years it has cost 10p to spend a penny. How long will it be before it costs us £10?

§ Mr. Walker
I warmly welcome the prospect for the first time of the people of Wales having a direct stake in their water company. I welcome, too, the fact that they will be able to arrange investment programmes without constant reviews by the Treasury, which were especially harsh during periods of a Labour Government. I believe that the provisions secure the river system that was created under the last reorganisation of water and that the Welsh people will warmly welcome the opportunity of having their own direct stake in this industry.

§ Sir Raymond Gower
Is not a respectable percentage of British water already under private ownership? Will my right hon. Friend tell us whether there have been all these terrible consequences because of that fact?

§ Mr. Walker
No. What is true is that prior to the last major water reorganisation, when a lot of water was in the hands of local authorities, there were enormous increases in pollution, great problems and a failure to invest. It is true, too, that the investment programmes of water authorities have since been affected by the Treasury decisions of all political parties. I believe that a company very much owned by the Welsh people and its employees—independent and strong—will be a considerable success and an advantage to Wales.

§ Mr. Livsey
Most people in Wales are opposed to water privatisation, but, nonetheless, it seems as though the Government will try to push this measure through. Has the Secretary of State any practical plans to enable consumers to become shareholders in Welsh Water plc?

§ Mr. Walker
We will have many plans for all the people of Wales to participate if they wish. I look forward with great pleasure to the hon. Gentleman's party and all the other parties making a commitment at the next election to renationalise the water industry, but I doubt whether they will.

§ Sir Anthony Meyer
Is my right hon. Friend aware that the Welsh people are extremely pleased and confident in the steps that he is manifestly taking to ensure that, if there must be privatisation of water, the interests of Welsh consumers and the environment of Wales will be fully protected?

§ Mr. Walker
Yes, Sir. That is an important matter and I am delighted at the conclusions that we have reached.

§ Mr. Rowlands
Is the Secretary of State aware of the sharp increase in the number of disconnections of water supplies to households? Will the Government introduce a statutory code on disconnections to ensure that the Welsh water authority sends a representative to visit every house to discover whether it is disconnecting water supplies to the frail, elderly or the disabled, because that is what is happening at present?

§ Mr. Walker
That is happening under a system that the hon. Gentleman wants to protect and retain. I only hope that if that system is working badly now, it will improve under privatisation.

§ Mr. Raffan
Does my right hon. Friend agree that as the Welsh water authority regards 95 per cent. of the 88,000 acres of land it owns as operational—in other words essential to water supply and water treatment—and as that land is and will continue to be subject to our planning laws, the threat to the Welsh environment is more imaginary than real?

§ Mr. Walker
Yes, Sir. It is an understandable ploy to try to create a scare before privatisation—it frequently happens. The present water authority has disposed of land under the present system and I have no doubt that that practice will continue if it considered that it is sensible and correct. I believe that there is no danger on environmental or recreational grounds. In fact there may well be a considerable improvement on recreational grounds.

§ Mr. Wigley
Will the Secretary of State give an assurance that if Welsh Water plc comes into existence—regrettably it appears that that will be the case—people will not be forced, under any circumstances, to take water meters in their homes, because of the adverse effects that that would have on health?

§ Mr. Walker
I do not know what policy will prevail on water meters in future. However, such a system has operated in certain places in England for some time, for example in Malvern, and I do not believe that there is any evidence that that system has had an adverse effect on people's health.

§ Mr. Barry Jones
May I confirm to the right hon. Gentleman that the people of Wales already own the Welsh water authority. Surely in health matters the guiding principle is need before profit. If the right hon. Gentleman cannot accept that, we are in danger of regressing to Victorian standards with major implications for public health in Wales. Will the right hon. Gentleman give me an absolute assurance that, after privatisation, we shall not have a steep rise in disconnections and in prices? Will he also come clean on the future of the Wrexham and East Denbighshire water company? Surely he will not abandon that little £6 million company to the takeover specialists.

§ Mr. Walker
The "owned by the people of Wales" argument also could have been applied to electricity and gas when a Labour Chancellor of the Exchequer decided to raise an extra £200 million to meet the payments to the International Monetary Fund from gas and electricity price increases. I do not believe that the people of Wales feel that they have any direct control, ownership or participation in Welsh Water when the investment programmes are settled, not by them, but by the Treasury.
I shall consider the detail and the points raised about the Wrexham and East Denbighshire water company. All I can say is that under present arrangements mergers betwen water companies have taken place, but what happens must be in the best interests of Wrexham and Wales.