Water Privatisation (Hansard, 22 April 1993)

§ 4. Mr. Beggs
To ask the Secretary of State for Northern Ireland what investigations he has carried out into alternatives to water privatisation in Northern Ireland; and if he will make a statement.

§ Mr. Atkins
As always in such circumstances, I have considered a number of options for the future of water. Nevertheless, the Government remain committed to water privatisation as soon as practicable. It was originally anticipated for 1995–96, but our financial advisers suggest that some technical problems which have to be addressed will delay it beyond the lifetime of this Parliament.

§ Mr. Beggs
I welcome the announcement that, albeit for technical reasons, water in Northern Ireland will not be privatised during the life of this Government. That can only lead us to anticipate the next Government and the assurance that the Labour party has already given that it will not be privatising water.
In addition to those technical problems, however, to what extent did my initiative on behalf of the Ulster Unionists—which gained the support of all Northern Ireland Members, MEPs and district councillors in opposition to the proposals—and the recognition of the growing number of disconnections and the hardship and threats to health caused by those disconnections in England and Wales affect the proposals?

§ Mr. Atkins
There is no secret about the technical reasons—

§ Ms Short
What are they, then?

§ Mr. Atkins
If the hon. Lady will wait, I shall tell her. When my hon. Friend the Minister of State replied to a debate on an earlier occasion, he was not able to give the details then because there were other matters in hand that he was addressing. There are, however, three reasons.
First, there is a long overdue reform of the charging procedure for Northern Ireland. As the hon. Member for Antrim, East (Mr. Beggs) will understand, there is concern that some people are paying either too much or not enough and the balance must be redressed.
Secondly, we are under pressure from the EC in respect of directives on the purity and quality of water. That will cost some £350 million to £500 million which at present will be found by the taxpayers. I am sure that the hon. 499 Member for Antrim, East and other Northern Ireland Members will recognise that that will be a substantial burden on taxpayers in Northern Ireland.
Thirdly, it is certainly the case that I and my hon. Friends on the Government Front Bench would want, if possible, to be able to float water privatisation rather than for it to be a straight sale, simply because that would give people the opportunity to buy shares as they have been able to do in other successful privatisations, such as Shorts, Harland and Wolff and, currently, Northern Ireland Electricity. Although there was opposition to those privatisations, they turned out to be successful.

Several hon. Members
rose

§ Madam Speaker
Order. We do not want ministerial statements. I should be much happier if we could have brisker questions and brisker answers so that we may make progress.

§ Mr. Allason
When my hon. Friend deliberates on water privatisation, and bearing in mind his reference a moment ago to the £500 million cost of the EC water purity directives, will he also consider the fact that that kind of investment by the taxpayer was not made when South West Water was privatised? When my hon. Friend considers water privatisation, will he bear in mind the fact that daft European directives can cost an enormous amount of money, not just to the taxpayer? Particularly in the south-west of England, it is our bitter experience that it has been a huge cost to the water charge payers.

§ Mr. Atkins
I apologise for the length of my previous answer, but I was asked for the technical reasons and I had to spell them out.
The answer to my hon. Friend's question is quite simply that I will draw it to the attention of my right hon. and learned Friend the Secretary of State for the Environment, who is responsible for those matters in England. Therefore, I cannot really be asked to comment any further.

Mr. William O'Brien
In view of the reply given to the hon. Member for Antrim, East (Mr. Beggs), will the Minister explain to the House what is happening to the £10 million allocated for the investigation into the privatisation of water in Northern Ireland? How much has been spent on the consultants appointed by the Minister's Department and how much is left in the fund? Will he agree to channel that money into other causes in Northern Ireland to improve the quality of life of the people—in particular, the bypass of the township of Omagh in County Tyrone?

§ Mr. Atkins
The hon. Gentleman is right to raise that point. It is worth reminding the House, however, that if one enters into any project, including a privatisation project, it is necessary to have specialised technical advice. These days, that costs money. If we had not obtained that specialised advice, we would be open to legitimate criticism from Opposition Members and others. In terms of the costs expended, I believe that that is value for money. Clearly, however, we have to spend more on investment projects such as those asked for by the hon. Gentleman. The kind of money to which I referred, for example, in respect of the water quality directives from the EC, will 500 require expenditure of up to £500 million. That is a lot of money which will have to be found by the taxpayer. That is why we need private sector involvement.