Water Rates (Hansard, 29 June 1994)

§ 10. Sir Teddy Taylor
To ask the Secretary of State for the Environment by what percentage domestic water rates have changed in each of the past three years; and if he will make a statement outlining the reasons for such changes.

§ Mr. Gummer
The average unmetered household bill for water and sewerage services in England and Wales has risen by 4.1., 6.5. and 6.2 per cent. respectively in real terms over the past three years. Those increases have been necessary to help pay for the massive programme of investment which the water industry is undertaking.

§ Sir Teddy Taylor
Is the Secretary of State aware of the view in the water industry that much of that increase, which causes great hardship, is the result of improvements in standards that are not necessary for public health? Is that the case, and how does my right hon. Friend see prices moving over the next three years?

§ Mr. Gummer
On the movement of prices, the water regulator has made it clear that he hopes that the increase will be between 0 and 2 per cent. above inflation in the period approaching 2000. My hon. Friend will be pleased that that is significantly less than the figures that I have announced. Although we might disagree about standards in some areas, those being demanded in general are those that the people of Britain expect in order to have the quality of water and beaches that they want and the improvements in the sewerage arrangements that are necessary. Privatisation has made that possible and I support the standards set down by the European Union.

§ Mrs. Helen Jackson
Is the Secretary of State aware that, in the five years since privatisation, charges have risen partly because profits have increased by £6.8 billion in all the water companies in England and Wales? That is more than double what the Director General of Water Services said was appropriate as recently as 1991. What will the Secretary of State do to ensure that that enormous surplus profit is called back so that the investment is not charged over and over again to the domestic water consumer?

§ Mr. Gummer
I am sure that the hon. Lady will look carefully at what the water regulator will announce on 28 July. She will be able to follow the figures clearly. The water regulator will, quite properly, take those into account. The hon. Lady attacked the water companies, but since privatisation they have become one of Britain's most important sources of exports and investment. As one goes round the world, from America to Malaysia to Australia, one sees that British water companies are winning contracts throughout the world. The industry won hardly a contract when it was nationalised.

§ Mr. Ian Bruce
Can my right hon. Friend resolve the dichotomy between the calls from Liberal Democrat Members urging the Government to speed up the cleaning up of our beaches and water and their cries when they are on the doorsteps that we should reduce water bills?

§ Madam Speaker
Order. I have cautioned hon. Members time and again about asking questions that do not concern Government policy. Questions should not relate to other parties in the House. I hope that I shall not have to give further lectures on that matter. Will the Secretary of State attempt to answer the question?

§ Mr. Gummer
The Government's policy is to point out that if we are to have better standards, we must pay for them. That is the only possibility. The dichotomy is resolved by saying that. Those, like the Liberals, who have a different policy on each doorstep in order to win votes, never have to resolve a dichotomy.

§ Mr. Chris Smith
The Secretary of State will know, however, that the annual results of the 10 privatised water companies, published in the past couple of months, show, for just the year 1993–94, a collective profit of £1.6 billion. He will know that their dividends have in every case increased by between 7 and 9 per cent. He will know that the salaries of their senior executives have been increasing in the past three years by far more than a Railtrack signalman could possibly dream of, yet the customers—especially in the south-west, but also everywhere else in the country—are confronted by sharply escalating charges. When will the Government take action to ensure that the managers look after their customers, not their own share options, first and foremost?

§ Mr. Gummer
I am afraid that the hon. Gentleman is wholly wrong in his attitude. The water companies are winning contracts and are providing a better service than has ever been provided before. Let me take as an example Anglian Water Services Ltd., which looks after most of my constituents. The number of complaints about that water company have plummeted since the privatisation took place. The hon. Gentleman does not live in the real world; he lives in the world of envy, which is the basis of socialism and his policies.