HC Deb 15 March 1995 vol 256 cc900-1
24. Mr. Ottaway

To ask the Secretary of State for the Environment what is the amount of capital investment undertaken by the water industry since privatisation.

Mr. Atkins

Since 1990-91, the first full year of privatisation, the water industry's gross capital expenditure has been about £15 billion.

Mr. Ottaway

I welcome that level of investment, which certainly would not have happened under a Labour Government, but does my hon. Friend feel that it is doing enough to exert downward pressure on prices? In my constituency, Thames Water supplies water to the north of the constituency at 40 per cent. below the price at which East Surrey Water supplies it in the south of the constituency. What is he doing to encourage more competition between adjacent water companies?

Mr. Atkins

I understand my hon. Friend's problem. He will know that the matter is for the water regulator—[Interruption.] As usual, the Opposition want it both ways. If the regulator is independent, they suggest that we should attack the regulator; if it is the reverse, they say that we are interfering. The regulator has a task to fulfil. My hon. Friend has raised that point in the past. I will ensure that the regulator understands the depth of his concern and reports to me accordingly.

Mr. Tipping

If the water companies were to borrow more against their assets, could they not invest more capital and reduce water charges?

Mr. Atkins

As usual, the Labour party has got it wrong. As a result of the Government's policy of privatising water, there is now more money available to do the necessary remedial work in a wide variety of areas, the cost of which would otherwise have been borne by the taxpayer. If the hon. Gentleman is suggesting that his party would be prepared to spend yet more money if it were in government, I should like to know where that money would come from.

Mr. Mans

Will my hon. Friend compare the figure that he has just given for investment in water infrastructure since privatisation with what happened during the 1970s, when the average amount spent per year on water infrastructure decreased from £900 million to £500 million between 1974 and 1979? Does that not show the success of privatisation in increasing investment in water infrastructure and giving everyone better water and a better system?

Mr. Atkins

My hon. Friend is quite right. He is in a position to know about the matter because, in Fleetwood in his constituency, North West Water is spending hundreds of millions of pounds to complete a sewage treatment centre which will solve some of the problems of sewage outflow on to the beaches. That is a substantial sum of money and it is indicative of the changed attitude of the water companies, now privatised, compared with their outlook under the dead hand of nationalisation.