HC Deb 27 February 1996 vol 272 cc710-2
8. Sir Teddy Taylor

To ask the Secretary of State for the Environment by what percentage the price of water for domestic consumers has changed over the past five years; and what assessment he has made of the reasons for the change. [15494]

Mr. Clappison

Average domestic water and sewerage charges have increased by 35 per cent., including inflation, over the past five years. Charges have risen to help pay for the massive modernisation programme which has been necessary to raise water quality and environmental standards.

Sir Teddy Taylor

As the sharp rise in the price of water is so different from the sharp fall in the price of the services provided by almost every other privatised industry—I am thinking of electricity, telecommunications and gas—would not it be helpful to give the public a full explanation of that difference? Does my hon. Friend agree that one of the basic reasons was the previous starvation of investment whereas the industry now has to bear the cost of implementing Euro-directives and the massive cost of removing agricultural chemicals and pesticides from water supplies?

Mr. Clappison

My hon. Friend knows that the Government are committed to improving agricultural practices. On the wider issue, however, he is right to make the connection between the need for investment now and the lack of investment in the past. He will be aware that, since privatisation, investment has run at roughly twice the previous level. It is certainly much higher than it was before 1979. Higher investment is necessary to pay for the environmental standards that we wish to implement.

Mrs. Helen Jackson

Does the Minister agree that the problem of the 35 per cent. increase is only compounded by the even greater increase in profits over the past five years? Is not it disgraceful that, for the past two years, investment in the industry has actually fallen, which gives the lie to his claims?

Mr. Clappison

The hon. Lady fails to see the link between profit and investment. Profit is very important for investment, and we want investment to continue so as to provide higher environmental standards, cleaner rivers, beaches and bathing water and high-quality drinking water. The hon. Lady's party would take us back to the bad old days of the Labour Administration when the industry was starved of investment.

Sir Sydney Chapman

I agree with my hon. Friend the Member for Southend, East (Sir T. Taylor) that the major reason for the increase in water charges is the fact that we have to meet EU directives. Will my hon. Friend confirm that half those directives have nothing to do with health and safety but are concerned only with matters of taste and colour? Even at this late stage in the huge investment programme, will my hon. Friend try to persuade his European ministerial colleagues to get rid of such unnecessary EU directives?

Mr. Clappison

I am sure that my hon. Friend will appreciate that the Government are committed to high standards of drinking water. Higher environmental standards across the board are the essence of the way in which we impose and interpret those directives. I know that my hon. Friend would wish his constituents in Barnet to have good-quality drinking water standards, just as we would for our constituents.

Mr. Matthew Taylor

The Minister will appreciate that the figures he cites disguise a wide variation in water prices across the country. Will he explain to those whose bills have doubled, or more, in the south-west—and other areas that have been hit hard—why the Government believe it is appropriate to continue to subsidise the already lower prices in Scotland but refuse any help to those who have been hit in high-paying areas such as the south-west?

Mr. Clappison

The hon. Gentleman will be aware of the particular need for investment in the south-west and the problems along the coast there. He would do well to bear in mind the need for investment arising from the lack of investment in the past. I am sure that he will join me in welcoming the improved environmental standards in the south-west. The hon. Gentleman should study the report issued by the Centre for the Study of Regulated Industries, which shows that the rise in prices in Scotland has been very nearly the same as that in this country.

Mrs. Peacock

I note what my hon. Friend says about investment in the water industry. He knows very well the amount that Yorkshire Water has invested. What does he say, however, to consumers in Yorkshire, given that Yorkshire Water has recently announced a 5.5 per cent. increase in its charges—more than twice the rate of inflation—and said in the same breath that it is not sure that it will be able to supply water to its customers due to possible shortages?

Mr. Clappison

My hon. Friend will know that, under the regulator's price structure, prices will be stabilised in Yorkshire and will be much lower in future. Particular problems in Yorkshire have been caused by exceptionally dry weather—[Interruption.] The Government are anxious to ensure that no water supply problems are caused by dry conditions in Yorkshire. Opposition Members who are shouting would do well to remember that, during the drought in Yorkshire last summer, no standpipes were used and there were no rota cuts, unlike what happened in 1976, when there was also dry weather.

Mr. Dobson

Will the Minister confirm that the average price rise hides the fact that, while water prices generally have been pushed up by 80 per cent., charges for metered supplies have come down by 2 per cent. in real terms? First, is not such discrimination against one group of customers unlawful and, secondly, is not it part of the Government's general secret agenda to force or bribe everybody to go on to meters?

Mr. Clappison

The hon. Gentleman is comprehensively wrong. It is a shame that he chooses to rubbish water metering, when it has important benefits for water conservation and the environment. The longer the hon. Gentleman rubbishes water metering, the more he shows that he is not concerned about the environment, has given no thought to the environmental consequences of water policy and has nothing constructive to say on the subject.