Water Supplies

HC Deb 08 May 1996 vol 277 cc242-96

Madam Speaker

I have selected the amendment standing in the name of the Prime Minister.

3.45 pm

Mr. Frank Dobson (Holborn and St. Pancras)

I beg to move, That this House deplores the long-term failure of the Government and the privatised water companies to reduce leaks from company pipes and to take other measures to reduce the threat to water supplies this coming summer and notes that they must mend their ways if they are to restore the confidence of consumers without whose co-operation measures to maintain supplies in some parts of the country may fail if there is a prolonged spell of hot dry weather. If we have average weather this summer, five water companies will be able to maintain supplies only if they extend existing drought measures or take additional action. Those companies are Yorkshire Water, North West Water, South West Water, Southern Water and South East Water. If the summer is hot and dry, 12 companies will need new hosepipe bans and new or additional drought orders to maintain supplies. Those companies are Essex and Suffolk Water, Folkestone and Dover Water, Yorkshire Water, South West Water, North West Water, Severn Trent Water, Southern Water, South East Water, Three Valleys Water, Chester Water, Mid Kent Water and East Surrey and Sutton Water. All of them say that they will not need rota cuts, standpipes or tankering. We all hope that they are right.

The situation that the country faces comes after a very wet winter in 1994–95, a dry summer in 1995 and a dry winter in 1995–96. It is also the product of a complacent Government, a slack system of regulation and the fact that the senior management of the privatised water companies have their minds on other subjects, such as their pay, perks and profits, speculative ventures at home and abroad and a series of takeovers, either proposed, opposed or carried through. No wonder that they have not had the time or the energy to concentrate on their core business of providing a reliable water and sewerage service in the areas in which the Government have given them a monopoly.

Mr. Michael Fabricant (Mid-Staffordshire)

Is it not the case that since privatisation some £15 billion has been spent on renewing pipes and so on? How much would have been spent by a nationalised industry? The hon. Gentleman mentioned the bosses who are supposed to have earned so much. Precisely what percentage is their income of the total investment of £15 billion that has been spent on new pipes and infrastructure?

Mr. Dobson

The relationship of the bosses' pay to investment is irrelevant to the public's perception of the way in which they have lined their pockets, although they are doing exactly the same jobs as before.

When I say that the Government have given a monopoly to the companies, I mean "given". The new private owners of the privatised water companies paid a total of £5 billion for the shares. In exchange, they got a green dowry of £1.5 billion and a debt write-off totalling £5 billion. That is £6.5 billion, for those who cannot add up. They also got the assets of the water and sewerage industry and a guaranteed income stream as the monopoly suppliers of water, which no human being, animal, plant, business or charity can do without.

One of the assets that the new owners acquired when they took over was the enormous good will of local people, who respected the people who worked for their local water company and who responded readily to appeals for the sensible use of water and for restraint if supplies were short during dry periods. The new owners have squandered that reservoir of public good will and co-operation, just as much as they have squandered water from their reservoirs and pipes.

The reason is easy to see. The public have seen the new water bosses line their pockets at the expense of the customers. They have seen company bosses, encouraged by the Secretary of State, putting more effort into investing in supermarkets at home and various speculative adventures abroad than in ensuring that local people receive a secure supply of water. People in Yorkshire remember that, when concern was expressed about an enormous pay increase for Yorkshire Water bosses, the company's official response was to say, "That's the way it is now."

Consumers have also noted the extraordinary ineptitude of Yorkshire Water's former bosses, the people who claim to be going without a bath. They are the people who propose rota cuts without having thought out how to maintain supplies to the fire brigade. They have not considered how food companies can be expected to clean thousands of gallons by boiling it, when their factories were designed to use clean and safe water straight from the tap.

The public have seen Yorkshire Water's chief executive retired early. It was a case of moving from no bath to an early bath. During the past week, they have seen the torch of aquatic lunacy pass from Yorkshire Water to Severn Trent Water, which has startled many innocent people by advising them to save water by concreting or paving over their lawns. That was advice that the chairman was not intending to follow, as the Daily Express discovered when he refused to allow its representatives to concrete over his lawn for free when they turned up with a cement lorry and offered to do the job for him.

We read nearly every day that someone is talking about a water company takeover. The British people are not fools. They know that the last consideration that enters the minds of the takeover movers and shakers is the interests of the customers, the security of water supply, the cleanliness of rivers or beaches and the protection of the environment. The public see water prices increasing. At the same time, they see water companies making record profits, reducing their investment, investing abroad, paying next to no corporation tax, investing in supermarkets, becoming involved in takeovers, getting rid of staff and giving themselves record levels of pay and perks.

The public hear the self-same water companies asking customers to make sacrifices, to exercise restraint and to behave responsibly. People do not like what they hear and see. Their views about the water industry have been ignored for far too long and they can be ignored no longer. That is because the ability of the water companies to maintain supplies this summer will depend on the co-operation of the customers they have insulted.

Greed, sleaze and incompetence have characterised the privatised water industry. As a result, the co-operation that the public used to give the industry will have to be earned all over again. Public co-operation will come about only if customers have respect for those who are asking for sacrifices and co-operation. That co-operation will be forthcoming only if the industry, the regulator and the Government all put their own houses in order, all accept responsibility for what has gone wrong, and stop trying to blame customers, the victims of the crisis, and asking them to shoulder the burden of putting things right.

It will be no use asking customers to exercise individual responsibility and restraint if the companies and their ministerial apologists do not show responsibility and restraint themselves. They must show that they have mended their ways. For a start, the companies should draw in the horns of their diversification programmes, which have diverted so much management time and effort from the core business.

If anyone doubts what I say, he need only read the recent public statements of Thames Water, which has had to write off £95 million, a sum which was lost because of what was described as "ill-fated diversification". That diversification took up so much of the managing director's time that, now that it has been cut, there is no longer a job for him.

Despite the £95 million write-off on diversification and the pay-off to the managing director, Thames Water's profits went up yet again, reaching yet higher—record—levels. Those profits do not come from the diversification; they come from the captive customers of the core business, water and sewerage, which the managing director had been neglecting. Despite the shambles of Yorkshire Water—no one can deny that Yorkshire Water has been a shambles over the past year: so much so that the chairman and chief executive have been dumped—the company's profits still went up. Yorkshire people feel that that cannot be right, and who can blame them? It is not right. If a company is run as incompetently as Yorkshire Water was and still makes record profits, there is something wrong.

Sir Kenneth Carlisle (Lincoln)

If the hon. Gentleman's party should gain office, will he take specific steps to stop water companies becoming involved in diversification?

Mr. Dobson

We will certainly use the powers that the Secretary of State currently possesses, under water industry legislation passed by the present Government, to ensure that the water companies discharge their duties to provide efficient and secure water supplies and to look after the environment. The Secretary of State can take direct action to do that.

Another development that is distracting the senior management of water companies from their basic task is the rash of takeovers and rumours of takeovers. Northumbrian Water, which has been subject to a takeover, admitted that its takeover by North Eastern Water occupied at least half the time of senior management, and we can assume that the same applied in North West Water, South West Water, Wessex Water, Severn Trent Water and Welsh Water, all of which have been making or resisting takeover bids.

Sir Jim Spicer (West Dorset)

As the hon. Gentleman will know, Wessex Water has put in a bid for South West Water. Both companies happen to be in my constituency. If the hon. Gentleman were in my constituency, would he welcome a takeover of South West Water by Wessex Water—or is he going to interfere with that, halting the natural flow and preventing a union that should have happened in the first instance?

Mr. Dobson

I welcome the hon. Gentleman's criticism of the privatisation legislation that created the present ragbag arrangement, but he had better make pretty sure that his constituents who are currently supplied by Wessex Water do not end up subsidising the proceedings if Wessex Water takes over South West Water.

Will Wessex Water promise to bring down the price for South West Water? That is the main concern. Will there be a universality of price between the two companies? If so, there is no doubt that the customers of Wessex Water will be subsidising those of South West Water. I do not know what the hon. Gentleman will say about his difficult problem.

The Secretary of State for the Environment (Mr. John Gummer)

I have listened carefully to the hon. Gentleman's attacks on the privatised water industry. Will he tell us whether, if there were a Labour Government, the privatised industry would be returned to national control?

Mr. Dobson

I have said this at the Dispatch Box before, and I will say it again. If we could afford it, we would carry out the clear will of the people and return the industry to public ownership, but we will not be able to afford it, so we must ensure that the industry is regulated in the interests of customers and the environment. [Laughter.] I do not know why the Secretary of State is laughing; that is a perfectly straightforward statement. We are stuck with what we have got.

Mr. Gummer

What that statement shows is that the Labour party knows perfectly well that it would not be able to invest the necessary amount in improving the infrastructure, as the privatised system has. That is what the hon. Gentleman has told the House. Now we know.

Mr. Dobson

I do not think that the right hon. Gentleman can conclude that from what I have said. If, in fairness to the taxpayer, we bought the industry back at the ludicrous price for which the right hon. Gentleman and his mates sold it to their mates in the City, we would have no problems; but that, I think, would be confiscation.

The present system of water regulation depends to a large extent—Conservative Members should bear the point in mind, because they established the system—on comparing the performance of one water company with another. Takeovers are bound to make that more difficult, by reducing the number of organisations that can be compared. Indeed, the water regulator has expressed concern about the diminishing number of comparators, and his fear that customers may suffer.

As a result, the amalgamation of water companies with electricity companies has another disadvantage to customers—this time as taxpayers. Such amalgamations allow the tax liabilities of one part of the new combined company to be offset against investment by another part. The result is that the combined company pays less tax. If those companies pay less tax, the rest of us will have to pay more. It is estimated that the amalgamation of the two north-west companies has resulted in a saving in corporation tax of anywhere between £30 million and £60 million.

Mr. Doug Hoyle (Warrington, North)

My hon. Friend has referred to the takeover of NORWEB by North West Water, forming United Utilities. That has led to the loss of up to 5,000 jobs without consultation. Is he also aware that North West Water is doing something else? In parts of the north-west, such as my constituency, it has installed about 121 card meters, 102 of which are in council properties, yet it has not sought the permission of, or consulted, the local authority.

When a person has bought the card and used up the amount on it, the water supply is disconnected. Previously, the water company had to go to court to get a disconnection. Is that process legal? Is it not another scandalous example of what wealthy and greedy companies—particularly North West Water—are doing?

Mr. Dobson

As my hon. Friend will know, a case is being pursued against North West Water, because people are concerned that the company might be breaking the law in depriving people of water without the courts' consent, which everyone previously assumed was required.

It is worth remembering that the Save the Children Fund produced a report—it is a good indication of the state of the country—that says: As a society, for the past 150 years in the UK, we have made a priority of access to clean water for all our citizens. Historically, it has been seen as unacceptable for families not to be able to afford water. Why has this suddenly changed, and without proper discussion for such a change in public health policy? I did not say that: the Save the Children Fund did.

In the north-west, North West Water has taken over North West Electricity, but the people there, whose bills provide the income for both water and electricity businesses, have been told that, for the rest of this century, all the benefits will flow to shareholders and not to them, although my hon. Friend the Member for Makerfield (Mr. McCartney) has a letter from Ofwat saying that that is not true. I do not know whether the bosses of the new United Utilities are trying to con the shareholders, the public, or a combination of both, or do not know what they are talking about.

It is worth bearing in mind that North West Water prices have risen by 7 per cent.—well above the national average—in the past year. North West Electricity prices have risen by 5 per cent.—far higher than the increase in any other electricity company in the country. The Government and the regulators appear to have a down on people in the north-west, who are being asked to pay bigger and bigger price increases without being offered any protection by any of the regulatory bodies, least of all the Government.

The only thing that seems to be coming down in relation to United Utilities is the number of staff. Estimates of job cuts going through at present range from 2,000 to 5,000. Most people in the north-west believe that the management of North West Water should have been spending its time reducing leaks and guaranteeing supplies rather than concentrating on takeovers.

Mr. Gummer

The House did not have a chance to dwell on what the hon. Gentleman said about profits. Is it not true that, if the water companies were as they were—nationalised—or renationalised, as the hon. Gentleman would like, they would pay no tax and make no profits, and instead ask the Exchequer to donate large sums of public money so that they could deliver the necessary investment? The hon. Gentleman cannot have it both ways. The present system provides money for all the good purposes on which the hon. Gentleman and I agree.

Mr. Dobson

I welcome the right hon. Gentleman's every complacent appearance at the Dispatch Box. Apparently, we are living in a sort of water nirvana. The only problem for the Secretary of State and his friends is that that is not how the public see it. North West Water is rolling in money.

Mr. Richard Burden (Birmingham, Northfield)

Will my hon. Friend comment on the Secretary of State's apparent amnesia about what happened before privatisation? The Secretary of State seems to have forgotten that, before privatisation, the Government prevented the water authorities, as they then were, from investing. They were told that they could not afford it, but the Government gave the privatised companies a present of more than £1 billion from the green dowry. If that could be given to the privatised companies, why could it not have been given when those bodies were in the public sector?

Mr. Dobson

My hon. Friend makes a good point. I remind Conservative Members that no Opposition Member voted for the nationalisation of the water industry. The Tory Government and the Secretary of State for the Environment voted to take the water industry out of the hands of local authorities, which had run it well for more than 100 years. They nationalised it because they could not think of anything else to do after their ludicrous reorganisation of local government.

North West Water was rolling in money. It must have been, because it found £1.7 billion to buy North Western Electricity, and then had the cheek to claim that the money did not come from water customers. But it always comes from the customers in the end. The capital and income stream from North West Water's non-water business is negligible. Its takeover depended entirely on being backed by the capital and income stream of the water and sewerage businesses.

The company's borrowing will be repaid by water customers, as the company chairman, Sir Desmond Pitcher, so elegantly stated in a letter to my hon. Friend the Member for Makerfield (Mr. McCartney): Debt repayment will be made from the inherent cash flows of the business. Presumably he could not get his tongue around, "It will be paid by the customers."

Let us be clear about this matter. The main reason for the rise in the cost of water is not operating costs or investment. The industry is organised so that there is a holding company at the top, to which the water service company pays large amounts. An examination of the increase in the cost of water plainly shows where the increased cost is being incurred. The main cause is the money that is being creamed off from the water and sewerage company to the parent company at the top. Since 1991–92, while contributions to maintenance costs have risen by 8 per cent. and operating costs have risen by 3 per cent., the money that has been creamed off to the parent companies has risen by 36 per cent.

Another problem with takeovers is that they make it so much easier for the utilities that are involved to confuse the regulators and the public about their true costs and profits. It is complexity leading to obscurity, and it was bad enough before the takeovers. I shall give an example of the inability of a regulator to spot money that was being squirrelled away before the takeover process got under way. The electricity regulator said publicly that he was shocked when he discovered that Northern Electric, faced with a takeover bid, had managed to assemble a £530 million fighting fund to resist the bid. That forced him to review his pricing formula for the whole of the electricity industry.

The regulator had got it wrong because he could not understand the books. At that time, he was looking only at the books of simple, straightforward electricity companies. How much more difficult will it be for the regulators after amalgamations and takeovers? Where companies have amalgamated either with other water companies or with other utilities, the customers of both will be rightly suspicious that that will enable the companies to hide the scale of their profits from the regulators, which is fairly easy, and to try to hide the scale of their profits from the public, which seems to be much more difficult. I call on the Secretary of State, therefore, to force the companies to throw open their books. The public want transparency, not obscurity.

If they want customer co-operation this summer, the companies will have to avoid any further exploitation of their profitable position. It is rumoured that, despite all the things that have gone wrong there, Yorkshire Water is so rolling in money that it is contemplating a major buy-back of shares. It is safe to predict that, if it does so, many customers in Yorkshire will decide that a company that is throwing around that sort of money will have to solve its water supply problems on its own. Any lack of corporate restraint by Yorkshire Water will undermine only its calls for customer restraint, and it will have an impact throughout the country, not just in Yorkshire.

Above all, if the water companies want public support if there is a drought this summer, they must deal with leaks from their own pipes, the principal waste of water in this country. The most spectacular example involves South West Water. It will not be able to persuade local people to save water if it does not put a stop to lunacies such as sending 1 billion gallons of water from the Roadford reservoir down the river out to sea. Admittedly, that was a more spectacular example than the day-to-day drip of waste, but that day-to-day drip is going on throughout the country. We know that, every minute, the companies are wasting 500,000 gallons of water from their pipes.

Mr. Fabricant

Will the hon. Gentleman give way?

Mr. Dobson

I shall not at the moment.

In the waste of water, Yorkshire Water, North West Water, Severn Trent Water and Thames Water are the principal culprits. Nothing much was done about that scandal until we exposed it last summer. It was not until then that the water industry, the regulator or the Government acknowledged even that water leakage from company pipes was a major problem.

I have considered water company annual reports for the three years before last year's crisis. Leaks were not even mentioned in North West Water's annual reports in any of the three years preceding last year's crisis. Nor were leaks mentioned in Yorkshire Water's annual reports over that period. Other company reports over the period referred to leaks, but they were leaks by customers, to which they wanted to draw attention.

The same applied to the regulator's annual reports. He mentioned only leaks by customers and the need to do something about those leaks. There was not a word about leaks from companies' pipes, despite the fact that they represent about 80 per cent. of total water leaked.

Mr. Gummer

Will the hon. Gentleman tell me of the occasions when leaks in the nationalised water companies were mentioned, apart from one in 1911?

Mr. Dobson

I simply cannot afford to employ seven civil servants to go back to 1911. I have been considering the period since the industry was privatised, on terms that the Secretary of State appears to think were good.

We have always said that dealing with leaks was the quickest way of saving water, a view backed by the National Rivers Authority. At first, the industry and its Government apologists denied that. Their next statement was that £4 billion was being invested in dealing with leaks, which was a total lie: £4 billion was being invested in anything to do with water, which might, by accident, have reduced leaks. When we checked to find out what was being spent on detecting and dealing with leaks by getting in touch with every company, the total in England was £68 million. That, however, was from eight of the companies, because the ninth could not even tell us.

We have called on the Secretary of State to set mandatory leakage targets for the water companies, and he has refused to do so. He will rely on them, he says, to set their own targets. They have done so, and what do we find? Let us consider the principal culprits among the companies.

According to a parliamentary answer given to my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson)—I pay tribute to all her work on this matter—although some companies are aiming for a 10 per cent. leakage rate by the year 2000, North West Water says that it aims to reduce its leakage to 22 per cent. by 2000, and Yorkshire Water says that it aims to reduce its leakage to 20 per cent "in the longer term", however long that may be. Apparently the Secretary of State is satisfied with those targets, which are an insult to water customers in the north-west and Yorkshire. I fear that, when there is an appeal to local people to save water, they will probably say that a spot of DIY is required from the companies before they will do anything.

In a further answer to my hon. Friend the Member for Hillsborough, the Government said that, during the latter part of 1995 and the first four months of 1996, the privatised water companies had announced additional investment of over £400 million—that figure is mentioned in the Government's complacent amendment to our motion—in developing water resources and improving the distribution network.

No one should be fooled by that statement; it does not mean that the money is being spent on dealing with leaks. When I checked about two hours ago with the Water Services Association—at present, one could say that it represents nine and a half of the major companies, because one of them is leaving—it said that none of the £400 million was being spent specifically on detecting and mending leaks.

Another problem with the Government's figure is that they do not specify the period over which the investment is taking place. For all I know, the money could all be for spending this summer—or this year, at least—or it may be spread over two or three years. Perhaps the Secretary of State will clarify the timetable.

If the water companies are to command support and a proper response from the public, they will have to mend their ways—and so will Ministers. The Government's record has been pathetic. For years, they ignored the leaks from company pipes and put the blame on customers. Labour Members of Parliament were told in the House by Ministers that customers were responsible for most of the leaks. That was a lie, which was told because the Government had been pursuing a secret agenda to force everybody on to water meters, and had never given proper attention to the leaks from company pipes.

When the Environment Act 1995 was a Bill, Ministers introduced an amendment to require the efficient use of water by customers, but rejected a Labour call to extend that requirement to the water companies. My hon. Friend the Member for Hillsborough was treated with contempt by the Minister who dealt with the issue. She had made a wise suggestion, so I suppose that is why it was rejected.

A little later in the summer, the Government produced a document entitled, "Using Water Wisely", containing 71 paragraphs of their deep and learned thoughts on that subject. Of the 71 paragraphs, 56 were devoted to water conservation by customers, including 29 on metering for customers. Only nine paragraphs were devoted to company leaks, and some of those were used to reject the idea of mandatory standards for leakage.

Sad to say, the water regulator has not performed much better. At the end of December, he had to admit: Ofwat has been looking more closely at companies' leakage forecasts made in 1989"— at the time of privatization— and whether they have been achieved. In many cases reductions planned and paid for"— by the customers— in the price limits set in 1989 have not been achieved". The regulator should have been keeping a closer eye on what was happening. It should not have taken a campaign by the Opposition to get him to do his job properly and find out that money taken from customers on the understanding that it would be spent on dealing with leaks was not being used for that purpose.

I have also looked at what the companies said in 1989; in the light of what I am about to say, the Secretary of State may need to change his amendment ever so slightly. The prospectus for Yorkshire Water is most interesting. Prospectuses are supposed to contain the truth; to put falsehoods into a prospectus when floating a company is a criminal offence, so I must assume that Yorkshire Water was telling the truth when it recorded that, in the five years before privatisation, the publicly owned water authority reduced leakage by 20 per cent.

When we look at the comparable figures for today, it would appear that, if the new privatised company's figures were accurate, and the prospectus was truthful—I accept no responsibility for either—leakage in Yorkshire has now increased. The National Rivers Authority, to be fair, was concerned for a long time about the levels of leakage and the capacity of the industry to maintain supplies in hot, dry weather without damaging the environment by abstraction from lakes, rivers and bore holes. There is little evidence that the NRA's warnings were taken seriously by the industry or by the Government.

Perhaps that was what the new chief executive of the Environment Agency—which has taken over from the NRA—meant when he said: If we're perfectly frank, the National Rivers Authority was perhaps too independent from government. As a result, it was left out of some important decisions. How independent you are affects how much the Government trusts you". If that was not what he meant, perhaps the Secretary of State will tell us what other important decisions the NRA was left out of.

I hope that that most revealing statement by the new head of the Environment Agency does not signal a move away from the attitude of the NRA, whose independent and hard-hitting reports were welcomed by everyone concerned with water supplies and the aquatic environment. The first report from the Environment Agency on drought seems to be more complacent about the likely position this summer than the last report produced by the NRA on the subject, which was published in February.

The new report took a less robust attitude than the NRA report towards possible future drought orders. I sincerely hope that this does not mean that the NRA has been nobbled by the industry or the Government—or both—now that it is a part of the Environment Agency. In any case, the Secretary of State has some explaining to do.

The people of this country want action from the Government, and action that is not directed against them as customers. They want practical proposals that will work, not flights of fantasy such as we heard from the Prime Minister the last time he was in Yorkshire. When speaking to the Tory Central Council in Harrogate—it says "Horrogate" in my notes—

Mr. Dennis Skinner (Bolsover)

That's because Lamont has got the nomination for Harrogate.

Mr. Dobson

My hon. Friend the Member for Bolsover is referring to the rumour that the right hon. Member for Kingston upon Thames (Mr. Lamont) got the nomination in Harrogate because he went into the selection meeting and sang, "Je ne regrette nowt."

If I may return to the subject of the debate, the Prime Minister said in Harrogate: We are going to introduce competition into the water industry. How the Tory faithful clapped. But no one else was taken in. The proposed scheme involves the possibility of some major industrial users who are located near the borders of a privatised water company getting water from a neighbouring company. The chances of that being extended to domestic customers are negligible, as, to be fair, the Secretary of State admitted the day after. Indeed, there is a possibility that domestic customers might suffer if cut-price supplies are offered to major industrial users, either by a new supplier or by an existing supplier trying to keep its business.

The Government have not yet extended competition for domestic customers to the electricity industry, although electricity is a standard product, and can be transported cheaply via the national grid. In the case of water, there is no grid. Water is not a standard product, and it is very expensive to transport over long distances, especially if it involves pumping from one watershed to another. The concept of competition becomes even less practicable when applied to sewage—another function of the companies. Sewage is certainly not a standard product, it has no grid, and it would be even more expensive to transport over long distances. People do not want any more daft interventions from the Prime Minister; they want a system that puts the interests of the environment and customers first.

Today, time does not permit us to devote ourselves to a proper consideration of the long-term future of the water industry—that must come later. In the meantime, we urge the Government to implement a six-point plan to restore consumer confidence in the water industry and to help avoid a crisis this summer.

We ask the Government to implement the following: that the water companies should be set mandatory targets for reducing leakages from company pipes; that the water companies should offer a free repair service to domestic customers; that customers should be offered free advice and help on other methods of saving water; that companies should be required to compensate customers for the interruption to normal supplies; that the Government should place a moratorium on water company takeovers for the time being; and that no licences for increased abstraction should be granted except where companies can demonstrate that there is absolutely no alternative.

The water companies could take on staff to carry out these vital tasks, and they have no excuse for not doing so. They may be short of water, but they are rolling in money. It is about time that they used that money to look after the environment and the interests of their customers. Nothing less will do.

4.26 pm

The Secretary of State for the Environment (Mr. John Gummer)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: welcomes the fact that, in the past year of severe drought in many areas, normal water supplies have been maintained with only limited restrictions, in contrast to 1976 when supplies were cut off for large parts of each day for over 1 million people for nearly two months; notes that under public ownership the water authorities did not invest sufficiently in infrastructure, causing pollution of beaches and the sea, high leakage rates, and drinking water of significantly poorer quality than today; notes that since privatisation in 1989 the water companies have invested over £17 billion in greatly improving their operations, efficiency and service to customers; notes the assessment of the Environment Agency that the measures taken so far by the private companies should be sufficient to maintain supplies in the coming summer, even if it is very dry, with limited further restrictions; notes that those companies have since last autumn put in hand more than £400 million of investment to ensure supplies; and commends the water regulator, the Environment Agency (and its predecessor, the National Rivers Authority), and the Government for the action that they have taken separately and jointly to enable the companies to meet their supply obligations both in the short and the longer term.". This week, the two most trivial contributions to the water debate have been Severn Trent's advice to its customers to concrete over their lawns and the speech of the hon. Member for Holborn and St. Pancras (Mr. Dobson). No other person in Europe could speak on the environment and discuss water without referring to climate change, to the problems of sustainable development and to the issues that face this nation and this planet.

The hon. Gentleman had to read the speech written by his research assistant—he could not even read the word "Harrogate" without noticing that his research assistant could not spell it. Today, the hon. Gentleman did himself no good in the way that he introduced the motion. He does not want to explain the system that he would like us to have. If he wants to be taken seriously, he must explain his preferred system for the water industry, how it would work and what it would deliver.

I shall look at the system that the hon. Gentleman supported and wanted to continue. If we consider how that system dealt with a drought and compare it with the present system, we shall get some idea of the excellence of the improvements, how far we have to go and what we ought to do. I refer to the last summer that was comparable with last year's summer and with the one that we may have this year. The summer of 1976, with a lengthy drought, showed beyond doubt that the municipal and nationalised system of the preceding years failed to keep up with demand.

In 1976, 40,000 properties in north Devon had to have their water supply turned off completely for two weeks, there were standpipes in the streets and 1 million people in south Wales were subjected to cuts for up to 17 hours a day for two months. That is what happened when there was a drought under the system supported by the hon. Member for Holborn and St. Pancras.

Mrs. Anne Campbell (Cambridge)

Will the Minister give way?

Mr. Gummer

I wish to say something that I am sure the hon. Lady will want to hear, and then I shall give way to her. In 1976 the then Labour Minister of State, Department of the Environment, Denis Howell, said: There are a number of lessons to be learned as a result of this year's experience. He was referring to the experience of nationalised water companies in 1976. He continued: I am asking the National Water Council"— do hon. Members remember that august body?— in collaboration with my Department, to carry out a detailed study"— not of the six points put forward by the hon. Gentleman— of the relative merits of different forms of water rationing by standpipe and by rota cuts".—[Official Report, 16 November 1976; Vol. 919, c. 1113.] He also asked the council to examine other aspects of the emergency measures. In defence of a nationalised water system, the Labour Government said that the only way to get through a year's drought—which was less severe than last year's—was by introducing water rationing, standpipes and rota cuts.

Mrs. Campbell

rose—

Mrs. Helen Jackson (Sheffield, Hillsborough)

rose—

Mr. Gummer

I want to give way to the hon. Member for Cambridge (Mrs. Campbell) because last time she interrupted me in a water debate, she did not know that Cambridge was supplied not by the Anglian water company, but by the Cambridge water company, and I had to correct her.

Mrs. Campbell

I am speechless at what the Secretary of State has just said, which is not true. I never made that mistake and would not do so.

In the winter before the drought of 1976, the average rainfall for England and Wales was down to 63 per cent. of the long-term average. In 1995, the rainfall, as a percentage of the long-term rainfall, was 138 per cent. That shows that the nationalised industry coped well in 1976, whereas the privatised industry of 1995 failed lamentably.

Mr. Gummer

Having heard the hon. Lady's comment, I think that the weather girl's job is safe. The hon. Lady should look carefully at the facts. I should also ask her to look in Hansard, because I think that she will find that, on my other point, I was right and she was wrong.

During a year in which many areas suffered a worse drought than in 1976, not one person had to be supplied by a standpipe and there were no rota cuts. The Labour Government did not introduce a Bill to stop leakages or to provide greater investment, but introduced an emergency Bill to enable the water authorities not to supply water.

Mrs. Jackson

Will the Secretary of State give way?

Mr. Gummer

I shall give way in a moment, but I am sure that the hon. Lady will want to know that, having experienced such a difficult year, one would expect the Labour party, in power, to say, "The one thing that we have got to do now is to make the sort of investment necessary to ensure that that does not happen again next year." Did the Labour Government do that? They did precisely the opposite: they slashed investment in the water industry. The very next year they had a six-month moratorium on investment in the water industry.

The figures clearly show that investment in the publicly owned water industry fell from about £2.3 billion in 1974–75—at 1993–94 prices—to about £1.3 billion in real terms in 1979–80. The worst year was the year after the drought. The hon. Member for Holborn and St. Pancras is wrong to complain about the significant investment that should be made this year after last year's difficulties. I shall give him the detailed figures for the extra investment this year. He failed to tell the House that when the water companies were run as he wanted, the Labour Government, far from investing in those companies after a drought, actually cut the investment and, for six months, made no investment.

Mrs. Jackson

The Secretary of State is being mischievous and misleading. Will he deny the figures printed in Hansard last week, which show that the capacity of the reservoirs in March 1995 fluctuated between 95 and 100 per cent. full? Does he accept that that was not the case in 1976? Yet by the end of August 1995, there was talk of standpipes in Yorkshire. In four months, one company had come to the end of its reserves through mismanagement. Does the Secretary of State accept that those figures show that last year's situation was totally different from that in 1976?

Mr. Gummer

The figures show quite clearly that, in 1976, for up to two months, 1 million people did not have water for 17 hours a day, 40,000 people were taking their water from standpipes and the Government of the day had an answer to the problem, which was to ration water and to cut investment in infrastructure. That is what the figures show. The hon. Lady should not express an attitude that clearly demonstrates that she would support everything that a nationalised company would do—including taking water away from people—but that she does not accept the real facts, which are that, during the whole of last year, no one had to go to a standpipe and there were no rota cuts.

Sir Jim Spicer

Can we again consider what happened in 1976 and re-examine another figure? In the Wessex area, leakages in 1976 were running at about 40 per cent., or probably a little higher than that. Does not that add fuel to what my right hon. Friend has already said about a lack of action? One would think that, if that figure were repeated across the country, the one thing that the rainmaker would concentrate on would be saying, in the following year, "We must do more to stop those leakages."

Mr. Gummer

My hon. Friend is unfair to the then Government. If he remembers, the then Minister responsible for the water industry—now Lord Howell—was able to do a rain dance; that rain dance was done and as a result we had lots of rain. I admit to the House that I do not have that ability, and I am sorry about it. But there is no doubt that the Labour party would do such a dance, because it would not invest in the water industry or be able to solve the problem with technology. Clearly, in the past it resorted to magic.

The fact is that last year, some areas experienced more extreme drought, more extreme temperatures and certainly higher demand from domestic customers than in 1976. But there were no standpipes anywhere and no rota cuts, and restrictions were limited to hosepipe bans and limitations.

Of course, there were areas where water was tankered in last year, but does anyone think that a Labour Government would have been able to provide sufficient funds to do that? They certainly did not do it in 1976.

They could have tankered in water to all those people in Wales and to all those people in the west country, but they did not, would not and could not because they did not have the money or the competence to do so. All they said was, "We shall ration water for more people." But that is what socialists always do. In the end, they always blame the customer and tell the customer that the only way to deal with the problem is to ration the supply.

Mr. Gerry Sutcliffe (Bradford, South)

Will the right hon. Gentleman give way?

Mr. Gummer

No. I have a little more to say before I give way to the hon. Gentleman, but I shall certainly do so.

We are now contemplating a second difficult, particularly dry year. I only wonder whether anyone seriously suggests that a nationalised industry would be able to match the capital expenditure that water companies currently have in hand. I am talking not about money spent over a long period, but about that which is being invested now. Severn Trent Water is investing £100 million; North West Water, £53 million; Thames Water, £35 million; Yorkshire Water, £171 million; Southern Water, £32 million; South West Water, £20 million; and Welsh Water and Anglian Water are investing £10 million each. More than £400 million is being invested by those companies to be able more effectively to guarantee water supplies. On top of that can be added the extra revenue spent on leakage control.

No one really believes that, today, under any Government, an extra £500 million would be provided for the water industry from the taxpayer's pocket. The hon. Member for Holborn and St. Pancras was naive when he said that, because of a particular amalgamation, he feared that less money might be generated through corporation tax for the taxpayer. The system that the hon. Gentleman prefers would provide no money for the taxpayer, but would demand large sums from him. That money was not forthcoming in the past, which is why all the necessary investment that I listed has had to take place now. No investment was made when the taxpayer was responsible for funding the water companies, and those taxpayers would certainly not provide the extra £500 million mentioned today.

Mr. Dobson

Will the right hon. Gentleman give way?

Mr. Gummer

I shall give way, but I just want the hon. Gentleman to comment on yesterday's speech by the water regulator, who said, although I do not think that he was talking directly about the hon. Gentleman: It is fashionable to criticise the water companies for their performance in last summer's drought, but some did well and overall the companies coped better than the water authorities had in comparable situations in the past … The water companies have subsequently increased investment and increasingly are getting to grips with leakage. In both cases they are spending more money without any increase in price limits.

Mr. Dobson

I have to say that Ian Byatt, the water regulator, whom I have known for 30 years, is as much part and parcel of the current inadequate system as is the Secretary of State. He does not exactly have an open mind, because he is in favour of the system that he regulates. I quoted him, and he has some explaining to do on why he did not pay attention to the money which customers paid in to control leaks and which was not spent on that work. Apparently, he noticed that omission only in December last year.

The Secretary of State keeps going on about money from the taxpayer, so can he tell us how much the nationalised water industry received from the taxpayer? Does it compare with the £6.5 billion gift from the taxpayer to the new owners at the time of privatisation?

Mr. Gummer

I have already given the hon. Gentleman the relevant figures on investment in the nationalised water industry. The funds then raised were not sufficient to enable it to carry out the necessary work. Since privatisation, large sums have gone into investment and as a result there has been a significant improvement in the quality of the water delivered.

Mr. Dobson

Will the right hon. Gentleman give way?

Mr. Gummer

Just a moment. The hon. Gentleman must tell us something: what would his favourite system have done instead of what has been achieved under the current system? Would he have spent more taxpayers' money on investment in the water industry, or would he have spent it in different ways? Does he think that the companies should not have spent what they did spend or that they should have spent it on something else? What would he have done? Would he have doubled expenditure by the taxpayer if he had been in charge? Unless he can tell us those answers, he cannot start to criticise what has happened since privatisation.

Mr. Dobson

Did the taxpayer contribute anything to the capital investment programme of the 10 publicly owned water authorities? If so, how much?

Mr. Gummer

The hon. Gentleman knows perfectly well that, over the years, investment in our infrastructure has been paid for in some cases by the municipal taxpayer, in some cases by the general taxpayer and in others by those who invested—

Mr. Dobson

He does not know the answer.

Mr. Gummer

With great respect, if the hon. Gentleman listened to the answer, he would learn more from one sentence than he was able to tell the House in his entire speech. Much of the investment was paid for by the customer, but the only way in which the necessary £400 million investment could have been generated before privatisation was through the taxpayer. The hon. Gentleman knows that perfectly well. He knows perfectly well that no Labour Government would have been able to deliver that. I know that that is true, because his alter ego, the then Minister responsible for the water industry, said in order to explain away the drought problem in the disastrous year of 1976: The fact that we were able to survive the drought … with no significant effect on industry and employment, though with hardship to some domestic customers and some effect on food prices, is a reasonably satisfactory outcome. That is what happens when Labour looks after Britain's water industry: we have higher food prices, water rationing, water cuts and water from standpipes. Of course, we could not afford to tanker in water during times of difficulty and there would be no hope of investment. That is what we would get under a nationalised system run by Labour.

The hon. Gentleman had the effrontery to come to the House and complain about a system that ensured that last year—when we experienced the most difficult climatic combination of heat and lack of moisture—nobody was on a standpipe and nobody failed to get water.

Several hon. Members

rose—

Mr. Gummer

I have now upset Opposition Members, so I shall continue my speech and upset them a little more. The system that the hon. Gentleman advocates did not deliver the goods in the 1970s. There is another reason why it did not do that. The nationalised system had no regulation at all. For example, drinking water quality was entirely a matter for those who owned the industry—that is, the Government.

The Government both controlled the industry and its investment and decided upon standards of drinking water. When the industry was privatised, a drinking water inspectorate was established in order to ensure that no short cuts were taken with drinking water quality. As a result, water quality is significantly better now than under a nationalised industry. We separated the chap who set the standards from those who had to pay for it.

The same is true of the Environment Agency and the National Rivers Authority. The hon. Member for Holborn and St. Pancras referred to what his research assistant had dug out and what he would think about the issue now—I hope that his research assistant will do a little more digging—but he did not mention what happened previously. When there was no Environment Agency and no National Rivers Authority, if the water organisations wanted to take water from a river, no one insisted that they reach agreements on environmental grounds. The hon. Gentleman calls the current system bad, but in the past there was no independent National Rivers Authority or Environment Agency. The water authorities could take what water they liked from the environment and turn a blind eye to the pollution that they caused. We have introduced those important changes. I seem to have upset Opposition Members tremendously, so I shall give way to the hon. Member for Truro (Mr. Taylor).

Mr. Matthew Taylor (Truro)

A little earlier, the Secretary of State said that the water companies had found an extra £400 million without increasing prices. Does that not suggest that the price regulation system has failed, as customers were told that they were charged the minimum price allowable on the then rate of investment?

Mr. Gummer

The water companies have other areas of activity from which they derive other sources of income. They are regulated extremely tightly and, when those regulations do not seem tight enough, they can be screwed down—which has occurred—by the water regulator.

Two more factors control the water companies now which did not exist before. The Director General of Water Services is able to ensure that customers do not have to pay if it is not right that they do so. The extra investment undertaken by the companies must come out of the pockets of the shareholders, rather than the customers. That is what happens now; that is why we have a regulator of that sort.

There was no mechanism whereby one could get enough investment under the nationalised industry. Nationalised industry investment counted against the total amount of public investment that could be spent. As a consequence, the water companies were constantly prevented from investing. That is why the then Chancellor of the Exchequer, Mr. Healey, introduced a moratorium: the water companies were the easiest to hit. We cannot do that now, partly because the companies derive their money from the market and partly because the water regulator ensures that the money is spent properly.

Mr. Barry Sheerman (Huddersfield)

rose—

Mr. Gummer

I shall just finish this before giving way.

The water regulator is there to ensure that if there are signs of mismanagement by the companies, they are taken over in the sense that they are inquired into. The Office of Water Services has dealt with three cases, including Yorkshire Water, and we shall be seeing its independent conclusions very soon.

I do not believe that the hon. Member for Holborn and St. Pancras does public life any good by attacking the independence of those who are recognised as wholly independent outsiders. The hon. Gentleman should recognise that this country relies on civil servants and independent regulators to be independent. By attacking anybody with whom he disagrees and saying that they are biased, he is showing, once again, his inability to distinguish party political campaigning from any pretence at trying to forward the interests of the nation or the water customer.

Mr. Sheerman

The right hon. Gentleman's mindset is wrong. He keeps saying that the Government owned the water supply system. Does not he mean that the people owned it—not some of the people, not Americans or French, but the people of this country? We now have something very different, but the right hon. Gentleman cannot begin to understand the difference between Government ownership and ownership by the people.

Mr. Gummer

The people may have owned the system, but they could not get water. They were rationed and had to use standpipes. They may have owned it, but they were cut off for two weeks and nobody would tanker any water to them. Whether they owned it or not, they did not get any water. That is what happened when it was nationalised under a Labour Government. They knew that they could cover themselves in their usual nonsense, saying, "As long as you own it, it is okay."

We know what it means to own the water supply system under Labour, because Denis Howell made it clear. It means water rationing by standpipe, rota cuts, emergency measures, some hardship to domestic customers and effects on food prices—I do not think that that meant that they would go down. Under the Labour party, ownership means that people do not get what they want.

The companies are now run much more efficiently and there is significantly greater investment. People can get the water that they want. In fact, more people get more water because their demands are greater.

Mr. Burden

rose—

Mr. Gummer

I shall give way in a moment.

As a result of the action taken by the companies and the regulator, the judgment of the independent Environment Agency is that it should be possible to maintain normal supplies if the summer is normal. It does not envisage a need for rota cuts, standpipes or even tankering if there is another very dry summer. We are talking about the possibility of two significantly drier than normal summers, one after the other, and under the privatised system, nobody will have to resort to standpipes or find themselves cut off for 17 out of 24 hours. In other words, we have shown clearly that, instead of dealing with the situation in the way that the hon. Member for Holborn and St. Pancras would have wanted, under privatisation, we shall deliver the water to the people.

Mr. Terry Rooney (Bradford, North)

Will the Secretary of State give way?

Mr. Gummer

I must get on.

That does not mean that everything that is done is good. I have criticised water companies for particular actions. However, there has been a lack of rainfall and that has had a severe impact on water stocks. The House should remember that since March 1995, some places have missed out on the equivalent of five months' rainfall. There is no doubt about the severity of the drought.

The hon. Member for Holborn and St. Pancras did not mention in his speech how he would cope with the drought. He did not mention what was really happening before the water companies were privatised. I am sorry that I do not have a chance to take the hon. Gentleman on a trip round Britain. He might not enjoy it, but I would enjoy it enormously. I would like to take him to Cleethorpes, Mablethorpe, Cromer and Sheringham, to Sutton on Sea and West Mersea, to show him where the filth went out of the pipe straight on to the beaches and to show him where people could not swim and would not let their children swim because of the filth that was still allowed by the water companies that his party supported in their nationalised state. I should like to take him round those places, because I should like him to learn a thing or two. I reckon that it would be worth all the hassle to do so.

I should like to take the hon. Gentleman to Mount bay in Penzance, to St. Ives, Bude and Lyme Regis. He laughs, but he has not noticed that those places now have clean beaches where people can go swimming, and the tourist resorts are protected. My hon. Friend the Member for West Dorset (Sir J. Spicer) and I went to have a look at what was being done in Lyme Regis only a week ago. The hon. Gentleman would never have been able to deliver what we saw. He would have stood there and pointed to the short sea outflow and the filth going into the sea and he would have said, "There is nothing I can do about it, guy. I am afraid that all we can do is to pass an emergency law in the House of Commons to ask you not to flush your lavatories so often, so the filth does not go directly into the sea so often." That is all the Labour party did to deal with the problem when it was in power.

The result was not only that we had vast pollution, but that we had a badly maintained water distribution network, drinking water that was not as good as it could be and high rates of leakage. It is about time the hon. Member for Holborn and St. Pancras looked at his figures for leakage. I do not know whether the House realises it, but the hon. Gentleman includes in his leakage figures every time a fire engine uses a hydrant for putting out a fire and every time the system is washed out, as has to be done after maintenance works.

Much leakage takes place, of course, on the customer's side, to some extent, and much more on the companies' side, but the hon. Gentleman does not do his case any good if he does not admit that leakage has been a long tradition in the industry. His party never raised the issue before privatisation. I asked the hon. Gentleman which of the reports of the municipal water companies included anything about leakage. He said that he could not afford to look it up. His research assistant appears to have been very busy, and I understand that he might need another week to do so, but I suggest that he finds out how enthusiastic water companies have been about leakage since 1911. I mention 1911, because that was the famous date when the municipalised water system admitted that it was much better to build a few more reservoirs than to do anything about the leaks.

There is nothing new about leakage, but we need to do something about it now because of the change in climate. It is interesting that the south-east has lower leakage rates. The companies there recognised the need to control leakage because that was where the shortage of water was felt most and extra demand came most sharply. The hon. Member for Holborn and St. Pancras was less than fair about what is being done. I join him in his attacks on some of the lunacies. I agree with him that it is unacceptable that South West Water took water out of the reservoir and put it into the sea. But the hon. Gentleman would have been more believable and he would have got more support if he had been prepared to admit, as The Times detailed this morning, that the water companies have made extra efforts to reduce leakage. He would have been more believable if he had accepted the considerable work that is being done before he got on to the particular improvements that he would like to see.

Mr. Fabricant

Does my right hon. Friend agree that—disgraceful though the recent action of South West Water is—at least it is in the public domain because it is a public company and has to make reports according to the Companies Acts? Is it not the case that similar accidents occurred before in the days of nationalisation, but that often the accidents were covered up and never came to light?

Mr. Gummer

My hon. Friend is right to point to the fact that it is a much healthier system to have public companies in the private sector, which have to report and can be seen to report, so that independent regulators can ensure that those reports are accurate. That must be sensible and it would have been better had we had that system before.

The hon. Member for Holborn and St. Pancras is right that we must go on pressing about leakage, and the only issue between us is how best to do that. It would be perfectly possible for someone outside, without detailed knowledge of local circumstances, to set mandatory targets. The only trouble is that it would not work, and I am rather keen on making things work. It would be much more sensible for each water company to propose what it thought that it could do, and for each of them then to go into detail, part by part—there are different areas of different water companies, as we found clearly in Yorkshire—with the regulator, thereby arriving at the maximum and best improvements that could properly and sensibly be made. If the water companies are not prepared to do that, I have the powers to force them to take such action. I have said repeatedly that I shall use those powers.

It will be much more effective to use my existing powers, having argued matters through and pressed a case, so that we get the best response possible, than to come in flat-footed from outside, having said to everyone, "We don't listen to experts." That is what the hon. Member for Holborn and St. Pancras said a week or two ago. He does not listen to experts. No doubt he would know exactly what the right leakage rate is for Sutton, Stretford and even St. Pancras. He would know. He would be able to tell others exactly what they should do. The hon. Gentleman wants mandatory rules that he sets out.

I do not believe that any sane person would consider the hon. Gentleman to have the ability to make such decisions. I do not consider his approach to be a proper way in which to proceed. I have powers and I shall use them. I shall use them, however, having sought to ensure that every effort has been made to use all the opportunities, the expertise and the willingness to meet demands that are available.

Mr. Dobson

If the idea of the Secretary of State setting mandatory targets is so stupid, why were such targets recommended by the National Rivers Authority? Before the right hon. Gentleman continues with inaccurate quotations, let me make it clear that I have never said that I do not listen to experts. I listen to them, but I do not necessarily agree with them.

Mr. Gummer

I do not want to quarrel with the hon. Gentleman. I hope that he will read again what he said. What he said may have been inadvertent. Many of my hon. Friends were present when he made the statement. We heard what he said, and it was repeated by my hon. Friend the Member for Welwyn Hatfield (Mr. Evans). My hon. Friend gave plenty of space to enable the hon. Gentleman to correct him, and he did not.

Mr. Dobson

The right hon. Gentleman is wrong.

Mr. Gummer

It is all very well the hon. Gentleman saying, "The right hon. Gentleman is wrong," from a sedentary position. That is the basis of his arguments generally. The hon. Gentleman had better look up the record for himself.

Mr. Dobson

I have.

Mr. Gummer

I am happy that the hon. Gentleman was so worried about it that he had to look it up. The House certainly gained the impression that he was not very keen on listening to experts.

As I said, I have mandatory powers and I shall use them. The only thing between us is whether we get a better answer in every area by going water company by water company and part of water company by part of water company, or whether we splash targets around and hope that things will work out in a reasonable way.

Mr. Burden

First, will the Secretary of State explain clearly the nature of the mandatory powers that he already possesses? Secondly, on what occasion has a Labour Member suggested uniform leakage targets throughout the country? Mandatory targets are entirely different. Thirdly, if the right hon. Gentleman is talking about Members being believable—he presumably wishes his concerns on these matters to be believable—why is it that the Government have not allocated any time for my private Member's Bill, the Water (Conservation and Consumer Choice) Bill, which would allow a proper debate to take place on all those matters and enable all the difficulties to be ironed out? Leakage, abstraction licences, water efficiency in the home and consumer choice on charging could all be discussed. Why is he scared of the Bill even being discussed in the House?

Mr. Gummer

The hon. Gentleman knows that what he has said about his private Member's Bill could be said about any private Member's Bill on an important topic. Time is allocated for private Members' Bills, and the hon. Gentleman has part of that time. I have no doubt that he will use his time as effectively as possible. No Government, including the Labour Government, ever found it possible to provide time for all private Members' Bills or for any private Member's Bill in the circumstances that the hon. Gentleman outlined. The nature of all such Bills is that they are promoted. They relate to many and varied issues and they are considered extremely important by those who promote them. If we provided time for all private Members' Bills, we would not have time to do what the hon. Gentleman would like us to do, such as improving the construction industry by means of the Bill that was presented to the House only yesterday.

If all that the Opposition mean by mandatory targets is that they would work out targets in every area with the water companies, and if the companies did not meet those targets, they would impose them, we do not disagree. That is precisely what the Government are doing. I have the necessary powers to do that and those are the powers that I shall use if the Director General of Water Services fails, with the water companies, to deliver the targets that I think are satisfactory.

There was a serious part in what the hon. Member for Holborn and St. Pancras had to say, which concerned me and will concern many people outside the House. Leakage is the only subject on which he can wax lyrical, and he is right to say that we should reduce leakage as much as possible. It is possible, however, to put leakage at the top of our agenda only because of the investment that has already been made, to raise the standards of drinking water so that they will begin to be as high as those that prevail in the rest of Europe. Investment has been made to clean up our beaches and to ensure that waste water reaches reasonably tolerable standards. Investment has begun so that the infrastructure can be replaced in a way that the great Thames ring main exemplifies.

The improvements that I have outlined could not have been achieved unless we had started with the investment that has come about only because of privatisation. The only thing that the hon. Gentleman can talk about is leakage, even though rates of leakage are those inherited from the long period during which his system of running the water industry prevailed, when he never complained about leakage, and his one-club approach does not command very much confidence outside the House.

I accept that the hon. Gentleman talks about some other issues. He seems not to do so, however, within the context of other Labour spokesmen in any other capital city of Europe. Extreme damage is being done to the Labour party's reputation and I want to help it bring the damage to an end.

If the hon. Gentleman were to talk to members of the Finnish Labour party, they would tell him that they are in favour of water metering because of the need for sustainable development, the requirement to take into account environmental needs and the recognition that it is the proper way to ensure that resources are properly used. Finland is not a country that is known for its hot summers. Neither is it a country where water resources are as tight as in many other countries. As I said, however, the Finnish Labour party would be entirely in favour of water metering for environmental reasons.

The same is true of the hon. Gentleman's German socialist colleagues, as it is of his Belgian, Greek, Italian, Austrian, Portuguese, Danish, French, Swedish and Spanish socialist colleagues. In 75 per cent. or more of those countries, water charges are based on the volume used, and all his socialist colleagues would say, "We need to have some form of water metering if we are to protect the public from the loss of water resources."

The hon. Gentleman could say, "I am in favour of water metering, but I need many protections." The hon. Member for Lewisham, Deptford (Ms Ruddock) would say that she needed protection for the very poorest people. Most of the countries that I cited do not have such protections. The hon. Gentleman might say that we should have more generalised arrangements in some cities. He might want metering entirely in new houses. He might say any or all of those things. That would be reasonable. I believe that because we have been so late in dealing with those matters, we must proceed with care and with great concern, to ensure that our proposals are socially equitable and the like. I also believe, however, that not to accept that it is necessary for the resources to be properly husbanded is to hold a view that is inconsistent with any environmental concern.

The trouble with the hon. Gentleman is that he will not even look across the sea to France. When President Mitterrand, the socialist President, considered these matters, for environmental reasons he deliberately chose to end the flat-rate system that was prevalent in many areas in order to help manage water resources. Obviously, according to Walworth road, if it was not invented here—even if it was invented by a foreign socialist—it cannot be applied here.

The reason why I have taken some trouble to help the hon. Gentleman is simply this. The Labour party is now seen as—well, its politics may be red, but it is brown environmentally. It has not a shred of a reputation in any of the environmental bodies in this country or abroad. I have just returned from a meeting of the Commission on Sustainable Development in the United States, where Britain took the lead in changing the way in which we deal with the pollution of the oceans. Water was a major topic of discussion.

I must tell the hon. Gentleman that not only our national environmental groups, but international groups, ask me what I am going to do about the fact that the Labour party—the party that forms the official Opposition—is so deeply opposed to the environment. It does not care about the environment. Its leader has made only one speech about the environment, and that was a copycat speech, featuring things that we had said some time ago. In so far as the hon. Gentleman is known for anything, he is known for being the least environmentally friendly socialist in the least environmentally friendly party in Europe.

The hon. Gentleman may giggle. That is his answer to any serious criticism: all that he does is sink into his beard and giggle. The fact is, however, that this is doing enormous harm to Britain. Matters that are common ground between the parties in other countries—environmental matters on which socialists and conservatives can work together in Germany, Belgium, Greece, Italy, Austria, Portugal, Denmark, France, Sweden and Spain—cannot be dealt with in the same way here, because the Conservative party is in favour of environmentally friendly action and the Labour party would not know it if it saw it. The truth is that the Labour party is deeply opposed to the environment, and deeply brown in all its reactions. It shows no sign of improving a terrible reputation and a very bad history.

Water resources and water supply are a prime area in which sustainable development is a perfectly practicable and applicable principle. We do not need socialist rationing; we do not need standpipes; we do not need people's water supplies to be cut off for 17 hours out of 24 for two months. We do not need that for sustainable development. We need a party that can even conceive of mentioning global warming and climate change when it talks about water—a party that can actually bear to reach for the words "sustainability" and "development", and put them together in a speech on resources of this kind.

What we need in opposition is a party that can for one moment lift itself fro n its dogma, and begin to see that the privatised system 'in this country has protected the customer and provided water in a way that was never achieved, and to standards that were never insisted on, when the industry was nationalised. We need a party that realises that, without that system, we have no hope whatever of meeting the demands of sustainable development to which the Government are proud to have signed up.

5.13 pm

Mrs. Helen Jackson (Sheffield, Hillsborough)

What an incredible finish that was to the Secretary of State's tirade.

We called the debate so that we could talk sensibly. We are not here to make the usual easy gibes about fat cats, or to gripe about the continual price increases. I have not come here to pillory Yorkshire Water yet again; what interests me is growing public concern that the very delivery of water and sanitation to people's homes is being threatened by company greed on the one hand, and Government inaction and drift on the other. Our argument is that the Government have used the excuse of privatisation to wash their hands—metaphorically— of what must be one of their core duties: the duty to ensure that people have adequate clean water and sanitation.

Last weekend, I listened to many leading Tories trying to come to terms with the humiliation that they had suffered last Thursday. Half of them claimed that they would win the next election on the basis of their well-tried principle of minimal government—taking government out of people's lives. Let us look at what that means for the water industry. Those of us who have been asking Ministers questions about this issue for some years—whether our questions have concerned resources, leakage control, pollution control, investment or top salaries—have lost count of the number of times when the response has been "It is for the company to decide on investment levels", or "It is for the shareholders to decide on the level of top salaries", or "It is for the director general to comment on this, not me".

Each water company is supposed to set its investment priorities on resources, leakage reduction or repairs and renewal. The companies are to be guided by an economic regulator. Consultations take place, and decisions are made, on the basis of a five-year financial cycle and five-year business plan. Those plans are not open to public scrutiny on grounds of commercial confidentiality—spurious grounds, given that each company is a monopoly in itself.

The regulator's guiding principle, which he often states, is "incentive" price regulation, which basically means giving each of those private monopolies an incentive to make excess profits, and to make only the investment that, in their view, is economically reasonable. Whatever the Secretary of State may say, environmental, social and public health factors are subsidiary.

We say that in a highly capitalised industry such as the water and sewerage industry, in which 85 per cent. of the cost is fixed, a five-yearly financial overview by a narrowly focused economic regulator is grossly inadequate. It makes it far too easy to put off the necessary long-term investment for the sake of short-term gain. Yorkshire Water's announcement last week of a £40 million investment in a link between the River Tees and the Kielder reservoir was welcome, but it came 10 years too late.

Contrary to what the Secretary of State says, there was a national water resources board that promoted the link with the Kidder in the mid-1970s because it was thought that Yorkshire would run out of resources by the early 1990s unless such a link was built. The regulator and the advice were there 20 years ago, but the investment was not made. It is being made now, in a crisis management exercise that will not lead to value for money or well-run contracts. Will not rushing £172 million into Yorkshire in six months lead to mistakes and poor planning for the future?

Then there is the case of North West Water. On a recent visit to south-east Asia with the Environment Select Committee, my hon. Friend the Member for Denton and Reddish (Mr. Bennett) felt quite at home, because around every corner he saw signs saying "North West Water" and personnel from the company whom he knew. He also felt uneasy, however, because he knew that back at home the Longdendale reservoirs were still only half full after last summer, and that those same North West Water pipes were leaking 30 per cent. of all the drinking water that the company treated at home. So what if North West Water's investment in south-east Asia is more economic than supplying Stockport? Where would that leave my hon. Friend and his constituents? What redress do they have?

Water resource planning must have a national overview and it must be open to public scrutiny. It was disgraceful when the Director General of Ofwat, who has a major part to play in any national overview, said that he was not prepared to be subjected to any public scrutiny at the public hearing in Leeds last month into the difficulties in Yorkshire because he was undertaking his own private, confidential survey.

Sir Donald Thompson (Calder Valley)

The hon. Lady has been wonderful in looking after Yorkshire Water. She has played her part valiantly and I agree with her entirely about the Director General of Ofwat hiding himself at that public inquiry. It was a completely inadequate response. She will not be surprised, however, if I say that I think that she has come to entirely the wrong solutions about the privatisation of the water industry. We would be in dire straits without it, but I shall not rehearse the points made by my right hon. Friend the Secretary of State.

Mrs. Jackson

I am grateful to the hon. Gentleman.

Mr. Gummer

I want to take the most urgent opportunity to tell the House that it has been drawn to my attention that the hon. Member for Holborn and St. Pancras (Mr. Dobson) said: I must say that I have never felt compelled to agree with experts … Whatever experts say, the current system is unfair.— [Official Report, 1 April 1996; Vol. 275, c. 56.] I am perfectly willing to say that that could clearly be interpreted as him saying merely that, on occasion, he did not think that experts were right. Although I am reasonably rumbustious in debates, I do not think that I have ever tried to mislead people on what has been said. The hon. Lady was very kind to give way.

Mrs. Jackson

I am grateful. Two friendly interventions by Conservative Members have left me almost lost for words. But we should recognise that on resources, leakage and the early-day motion that has been tabled today, there has been cross-party support.

Last year, the Government introduced legislation to establish an integrated body to deal with the environment—the Environment Agency, which we supported. However, they missed a huge opportunity to define and put in place the public national overview of water resources about which Opposition Members are talking today. Last week, the agency issued its first major report, and, indeed, it was on water. It has the right priority, but it has no powers: no powers to co-ordinate with any strength the other regulatory bodies concerned; no powers to insist on any investment in resources; and no powers to insist on preventive pollution control—only the power to prosecute when things go wrong. It has no input on leakage control. Section 6 of the Environment Act 1995 says that the agency's duty is to "consider", where necessary, means of conserving, redistributing or otherwise augmenting water resources in England and Wales", but it has no power to insist that the industry makes the necessary investment. The Government have missed an opportunity to use the Environment Agency to take a clear and proper overview of sustainable water resources. There should be a regulatory body for the entire water industry with which other regulators could work and to which they address their responses.

I should like to look a little closer at leakage. Of all the factors that affect water conservation and resources, the National Rivers Authority, the Environment Agency and all other experts agree that stopping leaks from company pipes is the most cost-effective way in which to meet demand more effectively in future; people out there know that too.

The Royal Society for the Protection of Birds undertook a survey through Mori two months ago in which it asked people what they thought was the best method of water conservation. Of those surveyed, 69 per cent. put mandatory leakage control at the top of their list and 41 per cent. put as their second best the possibility of grant-aided schemes for water efficiency devices in the home. People know what they want from water conservation and water policy. The Government are, however, refusing to act on those two issues.

What is more, the RSPB received more than 70,000 letters in support of the Water (Conservation and Consumer Choice) Bill, to which my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) referred. The issue of water is certainly well understood. The difference between now and before privatisation is that although it is still of great interest, it has never been the subject of such great public anger about the way in which it is managed and controlled.

For years, the Government's response to calls for leakage targets has been, "Well, that is the responsibility of each company. Each company will reduce leakage from its pipes to economic levels, and they are best placed to decide those levels." Ofwat has asked only for an annual report of leakage rates, which it publishes, but the companies' voluntary leakage reduction targets have not been published, as—again—they were said to be commercially confidential.

It was only as a result of Labour's campaign last summer that the gross wastage of 830 million gallons of treated drinking water leaking each day from company pipes was exposed. That amount is enough to meet the daily needs of half the population of England and Wales. The figures are amazing and instructive. Only last week was the campaign to publish leakage targets in Hansard successful. I was very pleased to see them published on 30 April at column 420.

We have only gone one quarter of the way to winning the battle that we need to win. Having published the targets, we must ensure that figures on how each company is meeting those targets are also published not only annually but quarterly so that everybody has access to them. I was interested in what the Secretary of State said in his closing remarks. We must ensure that where those targets are set, spending and investment to meet them is met by each company. If that is the pledge that the Secretary of State has given, I welcome that major U-turn, and so will everybody else in the country.

Will the Government go further? The Secretary of State mentioned the Housing Grants, Construction and Regeneration Bill, which received its Second Reading yesterday. Will the Government ensure that they use it to introduce sustainable water conservation measures so that each home in future will be water efficient and installed with low-level flush toilets, for example, which save up to 10 per cent. of water usage in the home? Will the Secretary of State go further and ensure that such conservation measures are implemented through building regulations and water byelaws? Unless they do that I fear that yet again they will use the debate to pile all the blame on domestic customers and will simply restrict household use by the imposition of metering of more and more properties.

Metering is a poll tax on water. It penalises poor families and brings huge paybacks to the rich. In Britain, there is no flat rate charge. The charge is graduated according to property value, and a person paying top whack property value in the north-west—for example, in the leafy suburbs of Manchester—pays £846 a year. The upper limit of North West Water charges to that person under a metered system, even if that person sprinkles his lawn and fills his swimming pool throughout the summer, is £473 a year. The average bill is £218 a year. Metering would undeniably result in huge paybacks to wealthy people who live in large houses with large gardens. Who will meet the extra cost of that charge of £400 to £600? It will be met by all the other customers at the bottom end.

Metering, which will give such paybacks to the rich, will be bound to put up prices for the majority. In addition, metering is expensive: it puts £25 a year on every bill in overhead charges. Lastly, it is not wanted and is not the way forward for water conservation. Water is too important to be left to market forces and economic regulation. Just as BSE has resulted in chaos in agriculture, in the vital sectors of water and sanitation the Government have no grip. They are happy to deregulate and privatise and to leave the public service interest to the market. By doing so they threaten not just public health, river life and the environment, but the very economy that they purport to support.

It is no wonder that the Water Companies Association called for a national approach in the press release that it issued last week. The supply side of the industry is desperate for a national approach. No wonder the Institute of Plumbing supports the Water (Conservation and Consumer Choice) Bill as a means to bring jobs back to its industry and that the Sewer Renovation Federation is still waiting for the investment upturn that it was promised. No wonder consumers associations and people throughout the country want the Government, or a Government, to adopt a national approach to water that puts customers and the public first. By their absence of leadership the Government have let down the public on this life-giving issue. It is time for them to hand over to others.

5.32 pm

Sir Kenneth Carlisle (Lincoln)

I am glad to take part in the debate, which takes place under the umbrella of global warming and climate change. Those are the most significant factors influencing the supply of water, and my right hon. Friend the Secretary of State mentioned them. We and other countries need to concentrate our efforts in that direction, because a solution in those spheres may solve our water problems.

Last year was frighteningly dry, and the winter rains were insufficient to replenish water levels in the soil or in streams. So far, this year has been even dryer. Those who are in contact with the countryside and with plant growth find terrifying the effect so early in the year of the lack of water. If it continues, the effect on domestic consumers later in the year could be severe. Perhaps we have to accept the dictates of global warming because any solution is long-term, but we must certainly look carefully at how we might mitigate the effects of this year's drought. In doing so, we should judge whether we have a better chance of finding a solution under the current water regime or whether we would have been better off if it were still nationalised.

The evidence shows clearly that privatisation is working. The Secretary of State told the House what happened in 1976—not only was water rationed, but the Government of the day cut all capital expenditure in the industry. The worrying fact about a nationalised water industry is that investment can be turned off at the whim of the Treasury. It is easy to do that because the effect is not apparent in the short term and it saves money. That was what happened when the industry was nationalised; now that its future is in its own hands some £17 billion has been invested. Some £450 million will be invested this year and it is planned that companies will invest twice their annual profits over the next decade. That would have been inconceivable if the industry had remained nationalised.

Investment on that scale has a significant effect on the consumer, but it is somewhat inconsequential to quote such global sums. Perhaps it is more relevant to consider what is happening in our constituencies because that can help us to appreciate the scale of the change. There have been many improvements in Lincoln. Many old water pipes have been replaced. That has improved water quality, which is better without iron deposits. There has been investment in a new pipeline from Nottinghamshire to help to secure supplies, and an extension and improvement of the sewerage system. Those are capital investments, but we have also enjoyed much better and more effective administration.

I have had far fewer complaints from the public since privatisation because, despite what the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) said, the privatised industry has to operate under a strict code of practice. It has targets to meet and it has to perform in certain ways. I have not had the problem of severance of supply to a house for a long time. We are all aware of the trouble that that used to cause but, somehow, Anglian Water has got over the problem and it no longer seems to be an issue.

My one word of advice for Anglian Water is that it should try harder to be a presence in the community. It is an important part of the community and it should have someone who is known there to represent it. Like any other good local firm, it should have a significant personality within the community. Anglian Water is confident that it can maintain supplies this summer. The levels in reservoirs which fell to nearly half empty last year are back to 94 per cent. capacity and Grafham reservoir, which is one of the largest, is full.

I agree with hon. Members who have said that we cannot be complacent about leakage. I am glad, therefore, that Anglian Water has decided to dedicate 65 teams to detect leaks and repair them, and that it plans to reduce the overall leakage level to some 10 per cent. by the year 2000. In the past 12 months, it has renewed 250 miles of mains. Generally, however, we accept that we must live with some leakage, which is inevitable in an industry of this nature. We just have to work hard to try to reduce it to the minimum.

To a certain extent, I am concerned about increased extraction from groundwater sources by Anglian Water. It is lowering the level of aquifers in the chalk. More work must be done before it taps further into that valuable long-term supply.

All hon. Members think that what people pay for water is important—it has been mentioned on several occasions. Water charges have gone up, but the increase has been largely to meet the dramatic increase in investment, which will help to protect us during dry times. After paying for that investment, we can look forward to more stable charges in the next 10 years and, during that time, our bills are likely to increase by less than 1 per cent. per annum in real terms.

I should like to raise one other issue connected with the water industry: the environment. From my observations, water companies are now far more sensitive to the environment and to the various habitats of which water forms a part. For example, Rutland Water in the Anglia region has developed not only a source of water supply, but a remarkable wildlife reserve.

This debate gives us a chance to re-emphasise the need for water companies to focus properly on the environment. My right hon. Friend the Secretary of State for the Environment rightly mentioned the improvement in the quality of drinking water and rivers, and the cleaning-up of many beaches. I hope that the hon. Member for Holborn and St. Pancras (Mr. Dobson) will take up my right hon. Friend's offer of a nationwide tour to witness those improvements.

I am especially glad about the improvement in the quality of our river systems. In 1990, 85 per cent. were judged good or fair; that figure has been raised to 90 per cent. We need to continue that performance. One of the good results of the improvement is the return of otters to our rivers. They require both quality of water and more sensitive management of rivers, so, if the authorities which are concerned with rivers leave more wildlife and curves in the river instead of digging straight channels, the habitat will improve. They have learned that. Some years ago, in our local river in Suffolk, the otter was reintroduced and it is breeding successfully. That has been one of this country's wildlife success stories. Such successes depend on stringent attention to water quality.

I wish the Environment Agency well in its daunting task of continuing that improvement. It is good that it is drawing up statutory water quality objectives in eight pilot regions. Those are targets to aim for to achieve improvement. We asked for such a policy during the passage of the Environment Act 1995 and it is good that it is being introduced. We must, however, be in no doubt about the pressure that drought can put on all river systems. There is drought, and the result is a reduced flow through river systems, so pollution is more likely to happen. That may be one of our challenges during the summer.

Privatisation has led to greater investment, to better management of the industry and hence to much better use of water supplies, which are becoming a scarce resource. It has been better, too, for the consumer and clearly better for the environment. We have not heard yet how the Opposition will improve on that progress. We expect the hon. Member for Holborn and St. Pancras to be much clearer about what he thinks and what his fundamental views are. We have heard many opinions, but without much clear policy. If he is honest with himself, he may recognise that he is big on florid paragraphs, but still thin on policy.

In the end, our water supplies rest on the dictates of a higher authority, and if my right hon. Friend the Secretary of State cannot dance for rain, we must all sit down and pray for it.

5.45 pm

Mr. Matthew Taylor (Truro)

I welcome the opportunity to speak on this subject and the fact that the motion has been put to the House, because there is no doubt that whether a full water supply can be maintained during the coming months, and the environmental impact that the struggle to do so may have, is in many people's minds and needs to be dealt with seriously by hon. Members. Although the Government and water companies seek to assure the public that water supplies will be maintained this summer, the experience of last summer does not do much to put minds at ease. Furthermore, the stresses on the environment are becoming increasingly clear.

Unless there is an immediate heavy rainfall, many parts of the country will again face a serious water shortage, which will manifest itself in widespread restrictions on water usage and put real pressure on the environment as rivers and lakes drain. We have been here before. Two years ago, the Liberal Democrats published figures showing the exceptional water leakage in all the privatised water companies. Last summer, many people throughout the country suffered from a restricted water supply, whether because of hosepipe bans in the south-west or the near cessation of supply in Yorkshire.

Following much stronger warnings issued by the former National Rivers Authority in February, at the start of this month, the Environment Agency found it necessary to warn of restrictions on water use next summer. Water companies on the whole—although not all of them—have been shamefully slow to tackle the problem, and serious doubts must be raised about their ability or will to ensure that water is properly managed as a natural resource, rather than being supplied as a source of profit.

Since privatisation, water prices for domestic customers in England and Wales have risen by an average of 39 per cent. in real terms, yet the water companies claim that they are underfunded and so cannot introduce the necessary measures to tackle leakages. In my constituency and throughout the rest of the region served by South West Water, the price rise has been much higher. Since privatisation, average water bills have risen by more than 100 per cent. in the south-west.

On that point, I noticed that the Secretary of State for the Environment—I commented on this to him directly—claimed that water companies have found £400 million more to invest without having to raise prices. That raises a serious question about where the money came from, given that customers were told that their bills had to rise to sustain the previous investment level. It appears that the water companies now admit to having an extra £400 million to invest, which they previously intended simply to pocket or to pass on to their shareholders—hardly a reassurance that the regulatory system on either prices or water leakages is working. One or the other—if not both—was clearly misjudged.

Our perception is that the problems that are giving rise to hosepipe bans in the south-west are more to do with ineffective management, a lack of effective regulation and ineffective distribution, than genuine water shortages. Yesterday, for example, I spoke to the chairman of the neighbouring Wessex Water. He says that there are no plans for a hosepipe ban, yet it has less water than South West Water, which services fewer people. With the highest bills in the country and on-going water restrictions, South West Water consumers are right to be angry. The same can be said for consumers in Yorkshire, in the north-west and in many other regions.

Given the huge prices rises, and the large profits widely perceived to be paid to water directors and shareholders, the prospect of another summer of hosepipe and sprinkler bans cannot go unaddressed. Equally pressing are the longer-term and further-reaching issues of the impact on our environment, such as the effect on aquifers, including their possible pollution, and the killing of important areas of the natural environment.

I do not suggest that we shall never need a hosepipe or sprinkler ban. In exceptional circumstances, such a ban may be a short-term necessity, but it should be imposed only in the context of a proper plan of supply and an understanding of the emergency measures needed, in terms both of the environment and of consumer needs.

There is clearly an urgent need for a published long-term strategy for the whole United Kingdom, which it would be the water companies' responsibility to ensure was understood by consumers, yet it is equally clear that such a strategy is missing. It is the Government's responsibility to ensure that one is put in place.

The Government have already announced that there will be no standpipes this summer, and the water companies continue to tell us that domestic water supplies will be protected, but 57 drought orders are already in force, and that number is likely to increase during the summer. In fact, the water companies have applied for drought orders in six of the past eight years, so it is hardly coherent to argue that they are used only in exceptional circumstances.

In the south-west, there is considerable doubt about the regional water company's ability to keep water supplies steady this summer. Roadford, one of the biggest reservoirs, is not even 40 per cent. full, which is perhaps not surprising given the fact that the company managed to pour away 1 billion gallons of water into the sea last year.

Apart from the threat to water supplies, any drought would have huge environmental implications. The only time that I agreed with the Secretary of State was when he said that the Labour party had failed to address the environmental issues, and that its motion failed to mention them at all.

As water reserves drop, reliance on abstracting water from rivers increases. That happened last summer, and the signs are that the process will be repeated this year. Rainfall over the past 12 months, including winter rainfall, has been well below average, which has left reservoirs in parts of the north-west, north Wales, Yorkshire and the south-west in a depleted state. Consequently, many water companies are again relying on river abstraction to meet demand.

A recent report from the Environment Agency found that 11 of the 33 rivers it identified had below average rates of flow for the time of year. That was in early April, and the situation is not likely to improve as the summer progresses. Moreover, following last summer's drought, the agency identified a general deterioration in the overall ecology of rivers, so any increased abstraction will cause significant environmental damage.

The overall response has taken the form of ever more pleas to the public to conserve water, but it is unreasonable to expect consumers to take a more active role in water conservation—and it is unlikely that they will—if the water companies do not play a more active role and if, at a time of huge profits, they are not seen to be taking the issue more seriously.

Reducing leakage is of paramount importance, yet there is still no coherent or consistent approach to target setting for leakage control. Two of the remaining nine companies in the Water Services Association—Northumbrian Water and Welsh Water—have yet to set a leakage target, fully six months after the association made a commitment to voluntary targets. That must raise doubts about the effectiveness of voluntary leakage targets, and it should make the Secretary of State pause for thought.

I should like there to be clear targets for reducing water wastage from pipes, and customers to be compensated if they are not met. Setting and monitoring those targets should be the responsibility of the Government in conjunction with the regulators, the Office of Water Services and the Environment Agency. The Environment Agency could take account of the environmental issues, and Ofwat the consumer issues. The Minister should ensure that the targets were acted upon and that the companies understood that, rather than setting the minimum targets that they can get away with to maximise profits for shareholders, they must set the highest standards that can be achieved, to ensure the best service to consumers.

Because Ofwat enforces the water companies' licence conditions, it has the means to ensure that they comply with the targets. Plans for leakage targets should be agreed as part of the licence conditions. Only when water companies and consumers fully understand the need to conserve water shall we make a start towards being able to preserve that resource.

Alongside a strategy for dealing with leaks, companies must develop strategies for encouraging households to avoid wasting water. In August 1994, Which? tested the advice from 10 water and sewerage companies in England and Wales, and found their advice on water efficiency wanting. There is little evidence that that has greatly changed.

The Environment Act 1995 gave water companies a new duty to promote efficient use. That duty should be performed, which can best be done through the provision by water companies of grants, advice and information for consumers on installing water-efficient fittings in their homes. There would be a benefit to the companies in so doing, because they would have to invest less in alternative sources of water supply.

Although reducing leakage and introducing water efficiency measures are important, they cannot be seen as a full solution to the problem of water conservation. Besides, it is unlikely that any increased leakage control or water efficiency measures will arrive in time to prevent water restrictions in the coming months.

A national overview for emergency water planning in England and Wales is needed. Regional emergency water resource plans could then be developed for each company, in liaison with the Environment Agency, Ofwat and other interested parties. The plans should identify the main measures to be adopted, depending on the severity of the drought and its location, and they should be subject to a full environmental impact assessment.

It will not do for water companies to believe that they can simply resort to the rivers and natural lakes and destroy the environment to maintain a service which they are already very adequately paid to provide without such extreme measures. However, the companies' belief that they can act in that way is based on evidence, because they seem to be granted the powers to do so quite easily. Such measures should be the last resort, and everything should be done to avoid them.

The plans should obviously involve such issues as a programme of publicity to explain why we need to save water, and a programme of measures to restrict non-essential use of water. In the long term, a more strategic approach to emergency water resource planning is needed.

The Government must develop a national action programme for water resources that deals with the long-term issues, such as leakage control, rising demand for water and increasing pressures on rivers and wetlands from abstraction. The Government's proposals as published in "Water Conservation: Government Action" fail to do that. The fact that the companies are no longer nationalised does not mean that there cannot be a national approach to solving the problems, in conjunction with the regulatory bodies and the companies. That is where I believe the Government have failed.

In consultation with the regulators and non-statutory bodies, the water companies should prepare a review of their water supplies. They should examine how much water is available for use, how much is needed in the long term, and the costs and benefits of the options identified, including support for consumers taking steps to conserve water.

In addition, all available options should be subjected to a strategic environmental impact assessment so that the best environmental option can be chosen—a proposal that I regret to say the Labour party did not make. If the Secretary of State is serious about a sustainable approach to water, I hope that he and the Minister who is to respond to the debate will at least agree that a full environmental impact assessment is vital.

If all those measures are adopted, and the water companies work with their customers to meet water conservation targets, public confidence may yet be restored in the water industry. Drought orders would then need to be used only in genuinely extreme circumstances, rather than almost every year, as they are now.

Water is a necessity for everyone, and the water companies must ensure a guaranteed supply for essential use. Water restrictions and drought orders, in the context of ever increasing prices, are certainly not welcomed by the consumer, and they are good neither for the environment nor for public confidence in the water industry in the form in which it has been privatised and under-regulated by the Government.

5.58 pm

Sir Jim Spicer (West Dorset)

I am usually fairly naive, and I had the impression that we were going to have a good debate that would focus the attention of the House and of the general public on the fact that last year was quite dreadful, possibly the worst for a century—

Mrs. Anne Campbell

indicated dissent.

Sir Jim Spicer

It is no use the hon. Lady shaking her head. We had our worst summer followed by a bad winter with low rainfall. We can see outside today exactly what the countryside, and particularly the south-west, might have to face this summer. We must all pull together and put out the warning orders now to everyone.

Instead of a constructive debate, the hon. Member for Holborn and St. Pancras (Mr. Dobson) returned us to old Labour by bashing privatisation. The hon. Gentleman's aim is to attack not just the water companies, but the evils of privatisation. He believes that if we still had nationalised industries we would be much happier and much better off. I will remind Opposition Members of what has happened to some of our major companies since the privatisations of the 1980s which—thank God—are continuing in the 1990s.

British Airways, for example, is a world leader which other countries envy. The House should think back to the state of British Telecom, which was a disaster before it was privatised. It is now an efficient service, with prices 20 per cent. lower than before privatisation. In the electricity industry, prices are down by 9 per cent. and, as we have heard, a further 1 per cent. cut is to be made next year. The gas industry has had problems with its public relations, but prices have gone down by 22 per cent. in real terms. Finally, BP stands head and shoulders above all its competitors in the world. All those companies were a drag on the Government and a disgrace to this country before they were privatised. In every case, customers are receiving better services across the board. Prices are coming down all the time, and everything is far better than it was.

That does not suit old Labour. The Opposition, aided by the media, made a great song and dance about the horrors of the water shortages last year. I am one of the few Members—together with you, Madam Deputy Speaker—who can remember what happened in 1976. We remember the constant attendance at the Dispatch Box of the rainmaker—a very nice man who did his best, but could not disguise from us the awfulness of the situation and the then Government's inability to do anything at all about it. My right hon. Friend the Secretary of State made full use of the examples of what happened at that time.

In 1976, 50 per cent. of the population suffered a hosepipe ban. That may not be the end of the world, but there were also standpipes everywhere and disconnections were carried out, causing real hardship on a scale that has not been seen since and will not be seen again in this country. We all know that that is true. Last year, we had a longer and drier summer. The House should remember that at this time last year, the temperature was 15 degrees higher than it is now. As a result, the drying out was not just on the surface, but deep down. That created problems very much earlier in the year. However, only 15 per cent. of the population suffered a hosepipe ban last year. All of us, including most of the water companies, have a lot to be proud of with regard to last summer. The contrast with 1976, when water was a nationalised industry under a Labour Government, is stark.

Hon. Members have referred to leakages, and I shall refer to my local company. In 1976, Wessex Water's leakages amounted to about 40 per cent. By 1990, the figure had gone down to 29 per cent. and by 1995 it had decreased further to 25 per cent. The target for 2005 is 15 per cent. There may be some people who do not look at the cost-effectiveness of getting below that target and who may say that there should be no leakages at all, but there comes a point when the cost of reducing the amount of leakages by 1 per cent. becomes absolutely exorbitant. Those of us in the south-west—I live in the Wessex Water area, and my bills are more respectable than those of South West Water's customers—do not want to pile on the agony by going for perfection. We want a sensible approach to leakages, and I think that we shall achieve that.

A lot has been said about investment. In the 1970s, the level of investment was appalling, due largely to the savage cuts made particularly in 1977. Wessex Water has stated that only £100 million was invested in its area throughout the 1970s, and the same applies in the South West Water area. As a consequence of the lack of investment, a backlog of schemes was created, and many of those schemes are only now being carried out. In the 1980s, investment rose to £500 million, and in the 1990s Wessex will spend £1.2 billion on water quality, beaches and sewerage improvements.

My right hon. Friend the Secretary of State mentioned South West Water's scheme in Lyme Regis. That scheme is drawing people from all over the world, but the cost has been enormous given that the population of Lyme Regis is only 3,000 to 4,000. The total amount of investment will be between £15 and £20 million but, as in other parts of the south-west, we had to improve our beaches and sewerage schemes. If we had not carried out those improvements, what a disgrace we would have been. I would like to have taken the hon. Member for Holborn and St. Pancras to Lyme Regis to see a short outflow pipe pumping out raw sewage because of a break in the pipe 50 yd offshore, but it is not there any more. Lyme Regis has clean beaches, and it is once again the pearl of the south-west.

Our consumption of water has increased because of rising living standards and higher expectations, and it has increased by more than 20 per cent. in the past 15 years. I do not agree with those who are opposed to water metering, as there is a case for it. Where else in the world can one turn on the tap and, no matter how much water one uses, one does not pay any more for it? Metering would also provide a check on people with larger gardens who in a dry summer perhaps use water to excess.

In the decade before privatisation, Wessex Water's charges were 4 per cent. above the retail prices index. Since then, the figure has fallen to 2.9 per cent. and I know that it will be reduced further. There are no restrictions in the Wessex Water area for this year, and there will be none. Wessex Water is an efficient company, which has shown other water companies a clean pair of heels.

Since privatisation our water companies are in demand world wide as consultants—something we do not give them credit for very often. People come here because of the quality of our water and the way in which our water companies operate. In Turkey, Africa and wherever major sewerage and water projects are being undertaken, our people are involved. According to the hon. Member for Holborn and St. Pancras, they ought not to be bothered with such projects, but should stay in their little isolated area looking after their own people. They should not bother reaching out to other parts of the world. That applies not just to the water companies, but to BP and British Airways.

I am glad that the water companies are privatised. Since privatisation, they are 10 times more efficient and, above all, the work force is more cohesive, happier and more dedicated than it ever was in the great bumbling empire that we had previously. The Opposition will never understand that.

6.9 pm

Mr. Gerry Sutcliffe (Bradford, South)

I shall not speak for too long because I know that other hon. Members wish to contribute to the debate. Like my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson), I shall complain about Yorkshire Water, about the Government and about the regulator. In west Yorkshire, all we want is a guarantee that we shall have water. Hon. Members have asked what will happen this summer. At the moment, there is still a drought in west Yorkshire. There are hosepipe bans, people cannot use car washes and there are certain water restrictions.

In years gone by, the authority planned for the future of water by building reservoirs. We were therefore extremely angry last year because the whole of west Yorkshire was threatened. In Bradford, in particular, we were threatened with standpipes and 24-hour rota cuts. There has been great public anger because of the way in which Yorkshire Water has operated as a privatised company. If it is an example of privatisation, the people of west Yorkshire do not want it because they have not received the services that they expected.

We had the ridiculous situation where the chief executive of Yorkshire Water claimed that he had not had a bath for three months and that people ought to conserve water. In August last year the Secretary of State told us to stop whingeing and to enjoy the weather—that is how seriously he took the impact of the drought crisis in west Yorkshire. Yorkshire Water wrote to companies in my constituency and told them to relocate temporarily. There was an enormous effect on our industry and companies could not believe the lack of professionalism of Yorkshire Water.

Today, we have heard that the United Kingdom has the finest quality water in Europe. The quality of the water in Yorkshire is questionable as a result of privatisation. Companies have had to install purification plants because of the lack of attention that Yorkshire Water gives to the quality of the water. Yorkshire Water cannot be blamed for the lack of rainfall and there is the issue of global warming, of which we have heard much today. Should we not have looked at those issues in terms of the investment that was needed at the time of privatisation? The Government gave Yorkshire Water and its assets away to a privatised company at a ridiculous price.

We are heading towards the 21st century and water should be readily available. Last year we had the ridiculous situation where the local fire authority had to write to Yorkshire Water to say that it was concerned about not being able to meet its requirements in cases of emergency. The health authority was concerned about public health in relation to gastroenteritis and other diseases caused as a result of a lack of water. Yorkshire Water did not consult the community about its concerns. The emergency offices of local authorities begged Yorkshire Water to say what it was going to do. Last year many hon. Members had to come to the House and raise issues relating to water in the Adjournment debate and in questions to Ministers. We should learn from the lessons of Yorkshire Water.

Yorkshire Water is now under new management. Dr. Kevin Bond, from the National Rivers Authority, is now the chief executive and managing director of Yorkshire Water. He has promised that things will be different. He acknowledges that what Yorkshire Water did last year was unforgivable. We hope that he will keep his promises.

We could not understand the role of the regulator in allowing Yorkshire Water to increase its prices by 5.2 per cent.—the maximum increase allowable under the formula that was negotiated. Yorkshire Water increased its prices by 5.2 per cent.; yet it threatened consumers and business users with a lack of water. I hope that the Government will not abdicate their responsibility—as they have in the past—but will look at a national position in relation to water. People in Yorkshire are going through a living nightmare at the moment because of the failures of Yorkshire Water.

We need a sustainable national grid system so that we do not have this difficulty again. We are heading towards the 21st century and it is inconceivable that the Government have not had the foresight to protect our water resources. We have heard about environmental damage. Yorkshire Water kept going by taking water from the River Wharfe, which affected the environmental conditions in that area. The people of Yorkshire were outraged.

The failure of the regulator and the Government to do anything about Yorkshire Water has made people want to see public accountability of water services. We need that accountability in terms of stronger regulations. It is the responsibility of the Government to ensure that people get water—it is a human necessity.

The Government have had to be dragged into the Chamber today to discuss water. The Labour party initiated the debate and has called on the Government to hold an inquiry into Yorkshire Water, to look at what went on and to look at the effects that the water companies have had in other areas. The Labour party always has to ask the Government to do these things. The people of this country know the truth—they know that the Government have been concerned about the dogma of privatisation against public need. We saw what happened in the local elections last Thursday, and the same will happen in the general election. The people will not forgive the Government.

6.15 pm

Mr. Michael Fabricant (Mid-Staffordshire)

I thank the hon. Member for Bradford, South (Mr. Sutcliffe) for keeping his comments brief. The hon. Member for Holborn and St. Pancras (Mr. Dobson) spoke for 40 minutes, but he said very little.

Ms Joan Ruddock (Lewisham, Deptford)

The Secretary of State spoke for longer.

Mr. Fabricant

The hon. Lady says that the Secretary of State spoke for longer, but there was content in his speech and he was saying what he intended to do. The hon. Member for Holborn and St. Pancras criticised and carped, but he said nothing. He does not have the ability to do anything because he is paralysed. No money will be made available to him in the unlikely event of his becoming Secretary of State for the Environment in a future Labour Government. The hon. Gentleman criticised the Government and the water companies. Ofwat has said: It is fashionable"— I have never thought of the hon. Gentleman as being fashionable— to criticise the water companies for their performance in last summer's drought, but some did well and overall the companies coped better than the water authorities had in comparable situations in the past —that is, when they were nationalised.

The hon. Member for Holborn and St. Pancras demonstrated that he had very little understanding of finance and I understand why he would prefer to see these industries remain nationalised. He confused revenue expenditure with capital expenditure. He asked why they were making such profits and said that they should be put into investment. Clearly, he does not know how to read a balance sheet. Over the next 10 years, the water companies will invest twice their profits in restructuring sewers and sorting out the major problems that we have had for some 50 years in relation to water leakage. Since privatisation, £15 billion has been spent to deal with water leakage and a further £24 billion will be spent over the next decade. That money comes out of profits.

The hon. Member for Holborn and St. Pancras talked about the sweeteners that he claims that the Government gave during privatisation. Even he could come up with a figure of only £1 billion—hardly much compared with the £40 billion to which I have just referred. The Secretary of State challenged the hon. Gentleman and asked him what he would do in the unlikely event of his becoming Secretary of State for the Environment. The Secretary of State asked him whether he would invest in a nationalised water authority, but he had no answer.

I congratulate my hon. Friend the Member for Lincoln (Sir K. Carlisle) on referring to climatic changes which have affected the availability of water in the United Kingdom. The hon. Member for Bradford, South pointed to the need for a national water grid, and I believe that he is right. However, I am not sure how it would be delivered. If it were in the form of a north-south tunnel, it would have to be three times the diameter of one of the channel tunnels and the environmental damage would be considerable. Perhaps we should be making greater use of canals and opening them up where they have been filled in. I am well aware of the argument that canals suffer from water evaporation, particularly in hot summers, and I am aware that narrow boats on canals can cause pollution. Nevertheless, canals could provide one answer. If the climatic change that we have suffered over the past few years were to continue, we should have to address that question.

The record since privatisation has been excellent. Some 99.3 per cent. of drinking water samples met the required European Union standard and, more importantly, 100 per cent. of all water sampled was safe to drink. Bathing water has already been mentioned by my hon. Friend the Member for West Dorset (Sir J. Spicer). Although I represent the constituency of Mid-Staffordshire, I was born in Sussex and I am conscious of the fact that water conditions, particularly around Peacehaven, were abominable. Southern Water is now spending millions of pounds to make the bathing water safe and the results are impressive. Some 89 per cent. of our beaches now comply with EU standards, compared with only 66 per cent. in the days when water was nationalised. Today, 95 per cent. of its sewerage works meet industry standards, whereas only 87 per cent. did so when water was nationalised.

Severn Trent Water serves many of my constituents in Mid-Staffordshire. More than 70 uprated or new sources of water have been examined since privatisation. Approximately 30 of them are being actively pursued at a cost of about £50 million. Approximately 170 distribution enhancement schemes—costing a further £50 million—are in progress. They are designed to improve pressure and low-flow characteristics in rural areas of my constituency. Approximately 250 additional people are now working on leakage detection and mains repairs. Expenditure on leakage repairs has increased from £15 million to £25 million since privatisation. I also pay tribute to the important work of the South Staffordshire water company, particularly in serving the Lichfield area.

We have heard all about the past—the Minister for standpipes and the Minister for drought under a Labour Government. What was the Labour Government's record? They cut investment in the water industry by one third; they cut investment in sewerage and sewage disposal by one half. They failed to implement the sections of their own Control of Pollution Act 1974 which related to water pollution. They failed to designate any beaches under the terms of the EC bathing water directive, despite the fact that it took effect in 1975.

The hon. Member for Holborn and St. Pancras talked about ownership. Under the Labour Government, the state owned British Airways: it owned shabby cabins and even shabbier stewardesses—outshabbying Aeroflot. British Airways is now a world success. Under the Labour Government's ownership, British Steel made steel that no one wanted. Under the Labour Government's ownership, British Telecom operated old exchanges linked to telephone boxes that never worked. Now, British Airways, British Telecom and British Steel are world beaters that contribute billions of pounds to support health care and education—instead of health care and education being deprived of funds to support the nationalised industries.

The hon. Member for Holborn and St. Pancras would like to see water renationalised; he would like to see taxpayers' money directed away from our schools and hospitals and into water companies. The hon. Gentleman refuses to welcome the fact that the privatised industries pay £60 million a week through taxes, not from, but into, schools and hospitals. The hon. Gentleman has today belittled the £15 billion spent on repairing leaks in Victorian sewers. He has ignored the legacy of under-investment by the nationalised water industry over the past 50 years.

The hon. Gentleman offered no solutions. As we heard today, his colleague the shadow Treasury spokesman offers no money for renationalisation; he offers no money for reinvestment and no money for repairs. All that we have are empty words, a policy vacuum, no solutions, no action and no money—rigor mortis. The Labour Front Bench team are like gorillas in the mist. The hon. Member for Holborn and St. Pancras—the old grey back—is rendered impotent by the bear from Dunfermline.

There is no simple answer to the water shortage, but the Labour party has provided no answers in any of the debates, whether on water, the economy, health or education. The Labour party probably will not have any answers in the debate on the fire service to be held later today. All that the Labour party can offer is the same sad old dogma that has been neutered by the Dunfermline vet. The Government have freed up capital so that more money can be spent on health, education and law and order.

In conclusion, as Ofwat has said: Water quality—drinking water and water waste—has improved considerably. This is shown in the improving quality of our rivers. Access to capital markets, backed with adequate financial strength, has enabled us to meet EC standards. The water companies have invested on an unprecedented scale. There is the answer. But there have been no answers from the hon. Member for Holborn and St. Pancras. Perhaps the hon. Member for Lewisham, Deptford (Ms Ruddock) will answer where her leader did not.

6.25 pm

Mrs. Anne Campbell (Cambridge)

I am pleased to have this final few minutes to talk about water. I had not intended to participate in the debate, but I was so outraged by the Secretary of State's vivid use of his imagination in stating what Opposition Members were supposed to have said, that I felt compelled to contribute.

Despite the wonderful picture painted by the hon. Member for Mid-Staffordshire (Mr. Fabricant) of the unprecedented levels of investment, the current leakage rate of some water companies is unacceptably high. North West Water has a leakage rate of 30 per cent.; Yorkshire Water has a leakage rate of 32 per cent. Many of the companies are still not prepared to commit themselves to a target in the near future. It is essential that we have leakage reduction targets, which are set in statute and with which companies are made to comply.

In the few minutes left, I want to talk about the Government's policy on demand management. The Opposition do not believe that universal water metering is the answer. The case was ably made by my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson), who spoke well about the difficulties that that system creates for many families on low incomes.

One of the problems faced by my constituents is that of high water charges. Despite the level of investment by Anglian Water, which has given it a low leakage rate by comparison with other companies, the charges for sewerage services in Cambridge have pushed up water charges to an extremely high level. Many families and pensioners have difficulty in paying their bills. Conservative Members may not have received so many complaints since privatisation, but a continual stream of people who face enormous difficulties in paying their water bills visit my advice surgeries.

Many pensioners believe that they would be better off with meters. For many people who use a small amount of water, water meters may be the answer. The Cambridge water company has offered to fit meters free for pensioners living alone. There has already been an enormous demand for that popular service—several thousand people are on the waiting list.

My constituent, Mr. Reg Dye, has been coming to see me about his water bills since privatisation—even before I became the elected Member of Parliament for Cambridge. He is most concerned: his water bills are exceptionally high because he lives in a flat. Flats are rated at a much higher value than many houses, so Mr. Dye has to pay higher water bills than many people who live in houses just across the road that have more bedrooms than his flat. He took up his case with the Cambridge water company and Ofwat, and asked them what they were going to do about his water bills. It was suggested to him that a meter would be the answer. After a great deal of investigation, it was discovered that, because Mr. Dye shares a header tank with his neighbours, it is simply not possible to fit a meter to his property without enormous expense.

I have a letter from the Cambridge water company to Mr. Dye, which states: At the present time, therefore, I regret to inform you that we are unable to install a meter in your flat. So even if meters become the declared policy and the way in which the Government manage demand, I fear that there will be many people for whom water meters are not only unsuitable but for whom they will be quite impossible to fit.

We must have a sensible alternative policy that does not hit people on low incomes or people who have exceptional demand through no fault of their own and that takes into account the fact that pensioners—who have been so badly hit by the Government—are paying excessive water bills, which are far higher than they can manage.

6.30 pm

Ms Joan Ruddock (Lewisham, Deptford)

In replying, it falls to me to remind hon. Members that this debate has been about the prospects for water this summer. Conservative Members have tried to talk about water quality and cleaner beaches, for which we may all be grateful. But I should remind them that those measures have been derived from European legislation, not from the Government's enthusiasm. My hon. Friend the Member for Bradford, South (Mr. Sutcliffe) has, of course, reminded us that there are still concerns about water quality in this country.

The pace of change in our society, the rate of household formation, increased consumption and increased leisure activities are all making dramatic demands on natural resources and the living environment. As my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) said, such change requires an overview, and it requires a national strategy for sustainable development that is aimed at protecting and enhancing the environment.

The Secretary of State claimed to have such a strategy, yet at every turn it has been undermined by privatisation and deregulation. Nowhere has that undermining been more damaging than in the water industry. Water—that most vital of life resources—under this Government has become merely another commodity, in an industry that is run in the interests of shareholders rather than of the people and the environment.

As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said in opening today's debate, massive increases in dividends, executive salaries and customers' bills have fundamentally undermined the concept of community provision, which is crucial to proper resource management. Before privatisation, ordinary people accepted that a public resource might have to be rationed in times of drought. Today, people believe that they are being ripped off by their suppliers, and that, if suppliers set themselves up to make private profits from a natural monopoly, they can expect unfettered demand from customers. Such a state of affairs has very serious consequences not only for this summer but for the long-term future.

We have heard tonight how the Environment Agency's report has shown that this winter's rainfall was well below average, that leakage was up, and that reservoirs have been depleted. Yorkshire Water's reservoir capacity is recorded as 57 per cent., North West Water's as 64 per cent. and South West Water's as 67 per cent. There has also been a limited recharge of aquifers, with the result that a number of ground-fed rivers and aquifers are flowing at levels below average for the time of year. As we have heard, the regions covered by Southern Water and by Anglian Water have been affected.

Many rivers, too, have below average flows, and the Environment Agency has already identified general deterioration in the overall ecology of rivers after last summer's drought. The Council for the Protection of Rural England and the Royal Society for the Protection of Birds have expressed concern at the deteriorating environment and its effects on wildlife. Yet increasing abstraction by the water companies has been the predictable response to the forthcoming crisis—and crisis it will be.

The water industry and the Secretary of State have claimed that there will be nothing worse than the usual measures". If that is true, people will of course be relieved to have the threat of standpipes removed. But the "usual measures" are unacceptable when they are the norm. Water companies have applied for drought orders in six out of the past eight years. Such temporary licences and drought orders were designed for real emergencies, not as a means of meeting increased demand. There are already 57 drought orders in operation, and it is obvious that extensions to them will be applied for and that more drought orders will be sought.

It is the water companies' failure to identify the developing shortage and to take action to reduce leaks which has led them to place such a heavy reliance on increasing abstraction, with the consequent pressure on the environment. Virtually all the actions that the water industry will take this summer and autumn are supply-led, and they will all have consequences for the environment.

Severn Trent Water is planning to build a 14 km pipeline, which will carry up to 35 million litres of water per day. North West Water has completed a new pipeline in a record six weeks, and it is building a new 12 km aqueduct. Incredibly, Folkestone and Dover Water Services are now reported to be negotiating to bring up to 2 million litres of water a day through the channel tunnel from France.

As my hon. Friend the Member for Bradford, South said, Yorkshire Water best exemplifies the water industry's failure. The Environment Agency accused it of breaking its own rules for operating reservoirs so that it could meet increased demand. Its current plans include expanding its distribution network, transferring water between rivers, transferring water between rivers and reservoirs, and building three more pumping stations. All that is planned, when purified, expensive drinking water is leaking at the rate of 103 million gallons a day. I do not argue that new infrastructure may not be necessary—local people will certainly hope to feel the benefit—but the piecemeal, panic approach described by my hon. Friend the Member for Hillsborough is no substitute for a long-term national and regional water strategy.

This summer's prospects for water are grim. As we have heard repeatedly in this debate, last year the water companies were slow to identify the problem, and slow to take action. As a result, reservoir stocks fell faster than they should have done, and crisis decisions failed to take account of the full environmental impact. That cannot be allowed to continue.

I am very glad that the hon. Member for Lincoln (Sir K. Carlisle) acknowledged that climate change specialists have identified a trend in more extreme and more unpredictable weather conditions—hotter summers and colder winters. Household formation studies predict the need for another 4.4 million homes in the United Kingdom within 20 years. What will be the consequences of such changes for water supply and the environment? Unfettered demand for water will be unsustainable.

Many wildlife sites in the United Kingdom are already threatened by current water resources management. An overview of threats to sites of special scientific interest by English Nature suggests that more than 100 SSSIs could be adversely affected by water abstraction. Another report to English Nature stated that groundwater abstraction probably contributes to changes in plant communities at 26 spring-fed wetland sites in Norfolk, Suffolk and Cambridgeshire—including several SSSIs for Norfolk and Suffolk, which represent at least 60 per cent. of fens covered by SSSIs.

I shall give one specific example provided by the RSPB. Fowlmere SSSI is one of the few fen habitats left in Cambridgeshire. Several red data birds can be seen on the reserve: bitterns, which are very rare, are regular winter visitors, marsh harriers occasionally visit that SSSI, and bearded tits have bred there. The wetland is fed by underground springs, and the groundwater is also pumped for public water supply. Even though compensation water is now being pumped, it is expected that, with the declining water input, the reed bed will begin to dry out.

That is but one of many examples that we could cite from all over the country if time permitted. There is an immediate need for a national overview and for emergency resource planning, supplemented by regional emergency water resource plans, developed in conjunction with the Environment Agency, Of wat and other interested parties.

Mr. Fabricant

The hon. Lady is right to identify such problems. Is she saying that she has reached an agreement with her hon. Friend the Member for Dunfermline, East (Mr. Brown)?

Ms Ruddock

The hon. Gentleman makes a ridiculous point, as he did throughout his speech. The Opposition are not arguing that the future Chancellor should provide for investment, but that the water companies that have made huge profits should invest the money they have collected from the consumers.

Water companies cannot be left to muddle their way through summer crisis after summer crisis. Immediate priorities must include a planned programme of publicity, conducted in liaison with the regulator and the voluntary sector, which targets both industrial and domestic consumers with the reasons why water should be saved. Measures must, of course, be taken to restrict non-essential use. Water companies must be obliged to collect environmental data so that full environmental assessments can be submitted with any future drought order applications.

None of that, however, will have any lasting impact unless the Government put in place a national programme that deals with the long-term issues—something that the Secretary of State signally failed to do this afternoon. Those issues are leakage control, rising demand for water and increasing pressure on rivers and wet lands for abstraction.

As my hon. Friend the Member for Holborn and St. Pancras said, reducing leakage is of paramount importance. As has been made crystal clear in the debate, Labour rejects compulsory domestic water metering, but we share the aspiration of reducing consumption in the home. Indeed, as we know, water companies have a duty to promote to customers the efficient use of water.

What might those companies do? The private Member's Bill introduced by my hon. Friend the Member for Birmingham, Northfield (Mr. Burden)—Water (Conservation and Consumer Choice)—offers many suggestions. Those companies could give grants for and advice and encouragement to use devices such as low-flush lavatories, gravity-fed showers, spray taps and hot water installation in homes. Those measures contain none of the health risks posed by compulsory metering.

Labour has again expressed its concern today about the attitude of the Environment Agency to further application for drought orders. As my hon. Friend the Member for Holborn and St. Pancras noted, the National Rivers Authority, in its report to the Secretary of State in February, said: Environmentally damaging Drought Permits or Drought Orders will not be supported unless all other options for maintaining essential supplies have been taken. We ask the Minister to tell us whether that is now the attitude of the Government, and the advice they might give the Environment Agency. We challenge the agency to apply the same judgment as its predecessors.

It is clear from the debate that short-term and long-term solutions are possible, and that the crisis could have been averted, just as any future crisis could be averted. What is even clearer, however, is that, once again, the Government of drift fail to provide the necessary leadership. [Laughter.] The Secretary of State may laugh, but his Government of drift fail to provide the leadership necessary to tackle the problem. Once again, we see a failure to regulate effectively in the interests of the economy and the environment, and a failure to gain the people's trust.

The Secretary of State makes frequent speeches outside the House exhorting people to be more environmentally friendly. I have often heard him speak about the need for people to conserve, re-use and recycle. Yet he, who would chastise an individual for throwing a tin can into a brook, is amazed when people protest at Brent Spar being dumped in the sea. And people will protest.

People are affronted by advice to concrete over their gardens or instructions to turn off their hoses, because it has the stench of hypocrisy. They ask the Secretary of State, "Why should I not water my lawn when my water company allows millions of gallons to leak from its pipes every day?"

The tragedy is that the public become twice-times losers—not only thwarted at home but ultimately risking the loss of precious habitats, landscape and wildlife. In the final analysis, it is the environment that picks up the bill for the water companies' failure to shepherd their resources. Labour in government will implement the plan outlined in detail by my hon. Friend the Member for Holborn and St. Pancras to ensure that that no longer happens.

6.44 pm

The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones)

My hon. Friend the Member for West Dorset (Sir J. Spicer) said that he had come into the Chamber expecting a good debate, and he implied that he was somewhat disappointed. My hon. Friend was uncharacteristically ill informed, because he obviously did not know that the hon. Member for Holborn and St. Pancras (Mr. Dobson) was to open for the Labour party. Had he known that, he would have expected at least the beginning of the debate to get off to a poor start.

As my hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) said, the speech of the hon. Member for Holborn and St. Pancras was a content-free zone. That does not surprise many of us who have listened to rent-a-rant from the hon. Gentleman, on many occasions and on many subjects. The phraseology used is exactly the same, only the subject changes, and certainly no constructive arguments are made. I do not happen to think that that poor start was reflected in the speeches of Back-Bench Labour and Liberal Members, and the speeches of my right hon. and hon. Friends.

I thought it would be interesting to look at the debate that we had on the water industry almost exactly five years ago on 18 June 1991. Speaking from the Back Benches, I said: Indeed, I thought that Labour Members had a brass neck to select this subject for debate. As the hon. Member for Southwark and Bermondsey said, their record in office was absolutely deplorable. Not only did Labour Members cut investment significantly then, but they are now proposing to renationalise the water industry, and the hon. Member for Dewsbury (Mrs. Taylor), who speaks on water issues for the Labour party, did not have the decency earlier to give me a straight answer to my question about how that would be funded. We must know how Labour Members would fund investment in the water industry if they would also take a tough line on prices. It is obvious that Labour gives the water industry a low priority in its plans. That reflects what happened when Labour was last in office."—[Official Report, 18 June 1991; Vol. 193, c. 182.] Nothing changes, and today the Labour party has acted in exactly the same way. It makes promises, but it cannot justify them by reference to where it would get the necessary resources.

A number of themes have run through the debate. The first and most obvious was hon. Members' attempts to place the issue in a national context—what some called a national strategy. The NRA published a national water resources strategy in March 1994, entitled "Water: Nature's Precious Resource". It was founded on the notion of sustainable development, the precautionary principle, and demand management. I should like to refer to each of those principles.

Sustainable development, which was rightly flagged up by my right hon. Friend the Secretary of State, but not even mentioned by the Opposition spokesman, is the background against which we must view the subject. That was reinforced by the contributions of my hon. Friend the Member for Lincoln (Sir K. Carlisle) and the hon. Member for Truro (Mr. Taylor). Questions must be posed not just about the location of development in the United Kingdom, but about our life styles and the demands we make on all the scarce resources around us. In that regard, water is no different from anything else.

I am not as widely travelled as my right hon. Friend the Secretary of State, but when I meet politicians from other countries, they make the same point: they cannot understand how the Labour party in the United Kingdom is so far adrift from the policies of all democratic parties in mainland Europe and in the rest of the world. It is a disgrace, and the hon. Gentleman should be ashamed.

The precautionary principle is another key element. The hon. Member for Truro referred to abstractions and drought orders. It is Environment Agency policy to refuse abstractions unless it is demonstrated that leakage is under control. The number of drought orders has fallen quite substantially. I welcome the fact that Yorkshire Water has made it clear that it does not want to resort to a drought order for the River Derwent.

Mr. Matthew Taylor

I requested that there always be environmental impact assessments. There should be pre-planning: the plans should be laid, and the assessments completed.

Mr. Jones

If the hon. Gentleman had allowed me to continue, I had intended to say that, when the inspector inquires into a proposed drought order, the National Rivers Authority's environmental impact assessment is made available to him. That is an important point.

A third key element in the national strategy is demand management. I do not think that it is possible to separate demand management from voluntary metering. The hon. Member for Cambridge (Mrs. Campbell) at least had the decency to accept that it has solved some people's problems and it certainly has an impact on water usage.

The hon. Member for Sheffield, Hillsborough (Mrs. Jackson) made a similar point in a different context, when she referred to people in posh Manchester suburbs who use unlimited amounts of water in sprinklers, for filling their swimming pools, washing their cars and so on. Some water companies have approached that problem by introducing water metering for that sort of usage. I think that one can make a perfectly reasonable case for compulsory metering of that sort of water usage, as opposed to water that is used for ordinary domestic purposes.

Mrs. Anne Campbell

rose—

Mr. Jones

No—I must continue, or we will lose time for the next debate.

Demand management must be viewed in the context of the comparison that has been made often today between the 1976 drought and recent droughts. One of the main differences is that water consumption was 14,000 megalitres per day in 1976. It has now increased to 17,000 megalitres per day. That means that we are putting more strain on scarce water resources; that point must be considered in the context of demand management.

Hon. Members on both sides of the House referred to leakage, and some hon. Members argued for mandatory targets. I have always agreed with the American slogan: "Waste reduction always pays", or WRAP. It may be a rather extreme application of it in these circumstances, but most water companies should begin to tackle their leakage problems. That is also the view of the Government and of Ofwat. If voluntary targets are not adhered to, the Director General of Ofwat must look at the case for imposing mandatory targets.

I am pleased that some hon. Members, such as my hon. Friend the Member for Dorset, West (Sir J. Spicer), saw fit to praise their local water companies for their many real achievements in that area. The hon. Member for Cambridge mentioned Anglian Water, and I would not want the debate to pass without mentioning my local water company, Three Valleys, which has also done extremely well in that regard.

A number of measures have been introduced to help reduce water wastage. For example, some companies offer free home repair services, and others are likely to follow suit as part of their duties under the Environment Act 1995, which obliges companies to offer free water efficiency advice. I believe that those measures will help.

Yorkshire has had specific water problems, to which the hon. Members for Bradford, South (Mr. Sutcliffe) and for Hillsborough referred. The hon. Lady said, very graciously, that she did not want to bash Yorkshire Water yet again. It is appropriate to rehearse what Yorkshire Water is doing as a result of its past experiences. I too welcome Dr. Kevin Bond's approach, and the humility that he has shown in view of past events.

A programme worth £100 million, which is now virtually complete, involves the installation of a series of new pipelines and pumping stations in north and east Yorkshire that will bring water into west and south Yorkshire for treatment and distribution. In view of the very low rainfall this winter—about 50 per cent. of the long-term average—in the reservoir catchment area serving Kirklees, the company recently announced a further £31 million investment to boost stocks and for additional pipelines to link the reservoirs with existing sources. Completion of the project is expected by August.

As insurance against the possibility of a summer that is even drier than last year's, the company is to start work on a £40 million river transfer scheme—subject to the appropriate application procedures—which will bring water into the region from the River Tees. That is supported by the Kielder reservoir. Yorkshire Water has also commissioned an independent inquiry into water supplies in its area. It has stated that it will consider the inquiry report when it is published, in order to determine how it will influence the company's future water supply plans.

The regulator and the Government have not been inactive, either. In November 1995, the Director General of the Office of Water Services decided to conduct his own inquiry into various aspects of Yorkshire Water's performance of its statutory functions, including those related to water supply. He has powers of enforcement, which may be exercised as appropriate following his investigations. Therefore, the director general believes that it would not be right for him to participate in the inquiry commissioned by Yorkshire Water—which the hon. Lady complained about—while his investigations continue. He expects to announce his conclusions within the next few weeks.

The Government have been monitoring the situation in Yorkshire, as in all other drought-affected areas, since the onset of the drought last summer. Drought order applications have been processed rapidly. We have commissioned independent assessments of Yorkshire Water's applications for emergency drought orders, and we continue to watch developments closely through the Government office for Yorkshire and Humberside.

Mrs. Helen Jackson

I have read the press releases issued by Yorkshire Water and by Ofwat. Does the Minister agree that it was a grave mistake for the director general not to offer some of those points for public scrutiny?

Mr. Jones

It is not for me to say. I have explained how the director general views his role: he feels that his independent inquiry would be compromised if he participated in the other inquiry. That is what I have reported to the House.

As my hon. Friend the Member for Lincoln said, we should decide whether it is easier to tackle the drought under the present arrangements or under the former nationalised industry arrangements. To my mind, there is no contest. No money would be available under the old-style arrangements: we have heard the long, sad story about Lord Howell and what he reported to the House. It is extraordinary that a Labour Minister should come to the House seeking legislative power to stop supplying water to customers.

The present situation is much better. We have coped well with the drought. It is a tremendous tribute to those involved that we have survived such a difficult period without the need for standpipes and rota cuts. Of course more can be, and is being, done to tackle leakage, to adopt a more strategic approach and to encourage people to use less water. The Labour party's silence is deafening when it is asked where it would get the money if it approached the problem differently. I am afraid that that is typical of Labour's approach. Its policy is a sham: it has no answers, and no way of providing them in the future.

Question put, That the original words stand part of the Question:

The House divided: Ayes 251, Noes 285.

Division No. 122]	[6.59 pm
AYES
Adams, Mrs Irene	Dunwoody, Mrs Gwyneth
Ainger, Nick	Eagle, Ms Angela
Ainsworth, Robert (Cov'try NE)	Eastham, Ken
Allen, Graham	Etherington, Bill
Alton, David	Evans, John (St Helens N)
Anderson, Donald (Swansea E)	Faulds, Andrew
Anderson, Ms Janet (Ros'dale)	Field, Frank (Birkenhead)
Armstrong, Hilary	Fisher, Mark
Ashdown, Rt Hon Paddy	Flynn, Paul
Ashton, Joe	Foster, Don (Bath)
Banks, Tony (Newham NW)	Foulkes, George
Barnes, Harry	Fraser, John
Barron, Kevin	Fyfe, Maria
Battle, John	Galbraith, Sam
Beckett, Rt Hon Margaret	Galloway, George
Bell, Stuart	Gapes, Mike
Benn, Rt Hon Tony	Garrett, John
Bennett, Andrew F	George, Bruce
Benton, Joe	Gerrard, Neil
Bermingham, Gerald	Gilbert, Rt Hon Dr John
Betts, Clive	Godman, Dr Norman A
Blair, Rt Hon Tony	Godsiff, Roger
Blunkett, David	Golding, Mrs Llin
Boateng, Paul	Gordon, Mildred
Bradley, Keith	Graham, Thomas
Bray, Dr Jeremy	Griffiths, Nigel (Edinburgh S)
Brown, N (N'c'tle upon Tyne E)	Griffiths, Win (Bridgend)
Bruce, Malcolm (Gordon)	Grocott, Bruce
Burden, Richard	Gunnell, John
Byers, Stephen	Hain, Peter
Caborn, Richard	Hall, Mike
Callaghan, Jim	Hanson, David
Campbell, Mrs Anne (C'bridge)	Hardy, Peter
Campbell, Menzies (Fife NE)	Harman, Ms Harriet
Campbell, Ronnie (Blyth V)	Harvey, Nick
Canavan, Dennis	Henderson, Doug
Cann, Jamie	Heppell, John
Carlile, Alexander (Montgomery)	Hill, Keith (Streatham)
Chidgey, David	Hoey, Kate
Clark, Dr David (South Shields)	Hogg, Norman (Cumbernauld)
Clarke, Eric (Midlothian)	Home Robertson, John
Clarke, Tom (Monklands W)	Hood, Jimmy
Clelland, David	Hoon, Geoffrey
Clwyd, Mrs Ann	Howarth, Alan (Strat'rd-on-A)
Coffey, Ann	Howarth, George (Knowsley North)
Cohen, Harry	Howells, Dr Kim (Pontypridd)
Connarty, Michael	Hoyle, Doug
Corbett, Robin	Hughes, Kevin (Doncaster N)
Corbyn, Jeremy	Hughes, Robert (Aberdeen N)
Corston, Jean	Hughes, Roy (Newport E)
Cousins, Jim	Hughes, Simon (Southwark)
Cunliffe, Lawrence	Hutton, John
Cunningham, Jim (Covy SE)	Ingram, Adam
Cunningham, Rt Hon Dr John	Jackson, Glenda (H'stead)
Cunningham, Roseanna	Jackson, Helen (Shefld, H)
Dafis, Cynog	Jamieson, David
Dalyell, Tam	Janner, Greville
Darling, Alistair	Jenkins, Brian (SE Staff)
Davidson, Ian	Jones, Barry (Alyn and D'side)
Davies, Bryan (Oldham C'tral)	Jones, leuan Wyn (Ynys Môn)
Davies, Chris (L'Boro & S'worth)	Jones, Jon Owen (Cardiff C)
Davies, Rt Hon Denzil (Llanelli)	Jones, Lynne (B'ham S O)
Davis, Terry (B'ham, H'dge H'l)	Jones, Martyn (Clwyd, SW)
Dewar, Donald	Jones, Nigel (Cheltenham)
Dixon, Don	Kaufman, Rt Hon Gerald
Dobson, Frank	Keen, Alan
Donohoe, Brian H	Kennedy, Charles (Ross, C&S)
Dowd, Jim	Kennedy, Jane (L'pool Br'dg'n)

Khabra, Piara S	Prentice, Gordon (Pendle)
Kilfoyle, Peter	Prescott, Rt Hon John
Kirkwood, Archy	Primarolo, Dawn
Lestor, Joan (Eccles)	Quin, Ms Joyce
Lewis, Terry	Radios, Giles
Litherland, Robert	Randall, Stuart
Livingstone, Ken	Raynsford, Nick
Lloyd, Tony (Stretford)	Reid, Dr John
Llwyd, Elfyn	Rendel, David
Loyden, Eddie	Rooker, Jeff
Lynne, Ms Liz	Rooney, Terry
McAllion, John	Ross, Ernie (Dundee W)
McCartney, Ian	Rowlands, Ted
Macdonald, Calum	Ruddock, Joan
McFall, John	Salmond, Alex
McKelvey, William	Sedgemore, Brian
Mackinlay, Andrew	Sheerman, Barry
McLeish, Henry	Sheldon, Rt Hon Robert
McMaster, Gordon	Shore, Rt Hon Peter
McNamara, Kevin	Short, Clare
MacShane, Denis	Simpson, Alan
McWilliam, John	Skinner, Dennis
Madden, Max	Smith, Andrew (Oxford E)
Maddock, Diana	Smith, Chris (Isl'ton S & F'sbury)
Mandelson, Peter	Smith, Llew (Blaenau Gwent)
Marek, Dr John	Spearing, Nigel
Marshall, David (Shettleston)	Spellar, John
Marshall, Jim (Leicester, S)	Steel, Rt Hon Sir David
Martin, Michael J (Springburn)	Steinberg, Gerry
Martlew, Eric	Stevenson, George
Maxton, John	Stott, Roger
Meacher, Michael	Straw, Jack
Meale, Alan	Sutcliffe, Gerry
Michael, Alun	Taylor, Mrs Ann (Dewsbury)
Michie, Bill (Sheffield Heeley)	Taylor, Matthew (Truro)
Michie, Mrs Ray (Argyll & Bute)	Timms, Stephen
Milburn, Alan	Tipping, Paddy
Miller, Andrew	Touhig, Don
Mitchell, Austin (Gt Grimsby)	Trickett, Jon
Moonie, Dr Lewis	Turner, Dennis
Morgan, Rhodri	Tyler, Paul
Morley, Elliot	Vaz, Keith
Morris, Rt Hon Alfred (Wy'nshawe)	Walker, Rt Hon Sir Harold
Morris, Estelle (B'ham Yardley)	Wardell, Gareth (Gower)
Morris, Rt Hon John (Aberavon)	Wareing, Robert N
Mowlam, Marjorie	Watson, Mike
Mudie, George	Welsh, Andrew
Mullin, Chris	Wicks, Malcolm
Murphy, Paul	Wigley, Dafydd
Oakes, Rt Hon Gordon	Williams, Rt Hon Alan (Sw'n W)
O'Brien, Mike (N W'kshire)	Williams, Alan W (Carmarthen)
O'Brien, William (Normanton)	Worthington, Tony
Olner, Bill	Wray, Jimmy
Pearson, Ian	Wright, Dr Tony
Pendry, Tom	Young, David (Bolton SE)
Pickthall, Colin
Pike, Peter L	Tellers for the Ayes:
Powell, Ray (Ogmore)	Mr. Greg Pope and Mr. Malcolm Chisholm.
Prentice, Bridget (Lew'm E)

NOES
Ainsworth, Peter (East Surrey)	Banks, Matthew (Southport)
Aitken, Rt Hon Jonathan	Bates, Michael
Alexander, Richard	Batiste, Spencer
Alison, Rt Hon Michael (Selby)	Bellingham, Henry
Allason, Rupert (Torbay)	Bendall, Vivian
Amess, David	Beresford, Sir Paul
Arbuthnot, James	Biffen, Rt Hon John
Arnold, Jacques (Gravesham)	Body, Sir Richard
Ashby, David	Bonsor, Sir Nicholas
Aspinwall, Jack	Booth, Hartley
Atkins, Rt Hon Robert	Boswell, Tim
Atkinson, Peter (Hexham)	Bottomley, Peter (Eltham)
Baker, Rt Hon Kenneth (Mole V)	Bottomley, Rt Hon Virginia
Baker, Nicholas (North Dorset)	Bowden, Sir Andrew
Baldry, Tony	Bowis, John

Boyson, Rt Hon Sir Rhodes	Goodson-Wickes, Dr Charles
Brandreth, Gyles	Gorman, Mrs Teresa
Brazier, Julian	Gorst, Sir John
Bright, Sir Graham	Grant, Sir A (SW Cambs)
Brooke, Rt Hon Peter	Greenway, Harry (Ealing N)
Brown, M (Brigg & Cl'thorpes)	Greenway, John (Ryedale)
Browning, Mrs Angela	Griffiths, Peter (Portsmouth, N)
Bruce, Ian (South Dorset)	Grylls, Sir Michael
Budgen, Nicholas	Gummer, Rt Hon John Selwyn
Burns, Simon	Hague, Rt Hon William
Burt, Alistair	Hamilton, Rt Hon Sir Archibald
Butcher, John	Hamilton, Neil (Tatton)
Butler, Peter	Hanley, Rt Hon Jeremy
Carlisle, John (Luton North)	Hannam, Sir John
Carlisle, Sir Kenneth (Lincoln)	Hargreaves, Andrew
Carrington, Matthew	Haselhurst, Sir Alan
Carttiss, Michael	Hawkins, Nick
Cash, William	Hawksley, Warren
Channon, Rt Hon Paul	Hayes, Jerry
Chapman, Sir Sydney	Heald, Oliver
Churchill, Mr	Heath, Rt Hon Sir Edward
Clappison, James	Heathooat-Amory, Rt Hon David
Clark, Dr Michael (Rochford)	Hendry, Charles
Clarke, Rt Hon Kenneth (Ru'clif)	Heseltine, Rt Hon Michael
Clifton-Brown, Geoffrey	Higgins, Rt Hon Sir Terence
Coe, Sebastian	Hill, James (Southampton Test)
Colvin, Michael	Hogg, Rt Hon Douglas (G'tham)
Congdon, David	Horam, John
Coombs, Anthony (Wyre For'st)	Hordern, Rt Hon Sir Peter
Coombs, Simon (Swindon)	Howard, Rt Hon Michael
Cope, Rt Hon Sir John	Howell, Rt Hon David (G'dford)
Cormack, Sir Patrick	Howell, Sir Ralph (N Norfolk)
Couchman, James	Hughes, Robert G (Harrow W)
Cran, James	Hunt, Rt Hon David (Wirral W)
Currie, Mrs Edwina (S D'by'ire)	Hunt, Sir John (Ravensbourne)
Curry, David (Skipton & Ripon)	Hunter, Andrew
Davies, Quentin (Stamford)	Hurd, Rt Hon Douglas
Davis, David (Boothferry)	Jack, Michael
Day, Stephen	Jackson, Robert (Wantage)
Deva, Nirj Joseph	Jenkin, Bernard
Devlin, Tim	Jessel, Toby
Dicks, Terry	Johnson Smith, Sir Geoffrey
Dorrell, Rt Hon Stephen	Jones, Gwilym (Cardiff N)
Douglas-Hamilton, Lord James	Jones, Robert B (W Hertfdshr)
Duncan, Alan	Jopling, Rt Hon Michael
Duncan Smith, Iain	Key, Robert
Dunn, Bob	King, Rt Hon Tom
Durant, Sir Anthony	Kirkhope, Timothy
Dykes, Hugh	Knapman, Roger
Eggar, Rt Hon Tim	Knight, Mrs Angela (Erewash)
Elletson, Harold	Knight, Rt Hon Greg (Derby N)
Evans, David (Welwyn Hatfield)	Knight, Dame Jill (Bir'm E'st'n)
Evans, Jonathan (Brecon)	Knox, Sir David
Evans, Nigel (Ribble Valley)	Kynoch, George (Kincardine)
Evans, Roger (Monmouth)	Lait, Mrs Jacqui
Evennett, David	Lamont, Rt Hon Norman
Faber, David	Lang, Rt Hon Ian
Fabricant, Michael	Lawrence, Sir Ivan
Fenner, Dame Peggy	Legg, Barry
Field, Barry (Isle of Wight)	Leigh, Edward
Forman, Nigel	Lester, Sir James (Broxtowe)
Forsyth, Rt Hon Michael (Stirling)	Lidington, David
Forsythe, Clifford (S Antrim)	Lilley, Rt Hon Peter
Forth, Eric	Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Dr Liam (Woodspring)	Lord, Michael
Fox, Rt Hon Sir Marcus (Shipley)	Luff, Peter
Freeman, Rt Hon Roger	Lyell, Rt Hon Sir Nicholas
French, Douglas	MacGregor, Rt Hon John
Fry, Sir Peter	MacKay, Andrew
Gale, Roger	Maclean, Rt Hon David
Gallie, Phil	McLoughlin, Patrick
Gardiner, Sir George	Madel, Sir David
Garnier, Edward	Maitland, Lady Olga
Gill, Christopher	Malone, Gerald
Gillan, Cheryl	Mans, Keith
Goodlad, Rt Hon Alastair	Marland, Paul

Marshall, Sir Michael (Arundel)	Soames, Nicholas
Martin, David (Portsmouth S)	Speed, Sir Keith
Mates, Michael	Spencer, Sir Derek
Mawhinney, Rt Hon Dr Brian	Spicer, Sir James (W Dorset)
Mayhew, Rt Hon Sir Patrick	Spicer, Sir Michael (S Worcs)
Mellor, Rt Hon David	Spink, Dr Robert
Merchant, Piers	Sproat, Iain
Mills, Iain	Squire, Robin (Hornchurch)
Mitchell, Andrew (Gedling)	Stanley, Rt Hon Sir John
Mitchell, Sir David (NW Hants)	Steen, Anthony
Monro, Rt Hon Sir Hector	Stephen, Michael
Montgomery, Sir Fergus	Stern, Michael
Nelson, Anthony	Stewart, Allan
Neubert, Sir Michael	Streeter, Gary
Newton, Rt Hon Tony	Sumberg, David
Nicholls, Patrick	Sweeney, Walter
Nicholson, David (Taunton)	Sykes, John
Norris, Steve	Tapsell, Sir Peter
Onslow, Rt Hon Sir Cranley	Taylor, Ian (Esher)
Oppenheim, Phillip	Taylor, John M (Solihull)
Ottaway, Richard	Taylor, Sir Teddy (Southend, E)
Page, Richard	Temple-Morris, Peter
Paice, James	Thomason, Roy
Patnick, Sir Irvine	Thompson, Sir Donald (C'er V)
Patten, Rt Hon John	Thompson, Patrick (Norwich N)
	Townend, John (Bridlington)
Pattie, Rt Hon Sir Geoffrey	Townsend, Cyril D (Bexl'yh'th)
Pawsey, James	Tredinnick, David
Pickles, Eric	Trend, Michael
Porter, David (Waveney)	Trotter, Neville
Rathbone, Tim	Vaughan, Sir Gerard
Redwood, Rt Hon John	Viggers, Peter
Renton, Rt Hon Tim	Waldegrave, Rt Hon William
Richards, Rod	Walden, George
Riddick, Graham	Walker, Bill (N Tayside)
Rifkind, Rt Hon Malcolm	Waller, Gary
Robathan, Andrew	Ward, John
Roberts, Rt Hon Sir Wyn	Wardle, Charles (Bexhill)
Robertson, Raymond (Ab'd'n S)	Watts, John
Robinson, Mark (Somerton)	Wells, Bowen
Ross, William (E Londonderry)	Whitney, Ray
Rowe, Andrew (Mid Kent)	Whittingdale, John
Rumbold, Rt Hon Dame Angela	Widdecombe, Ann
Ryder, Rt Hon Richard	Wiggin, Sir Jerry
Sackville, Tom	Wilkinson, John
Sainsbury, Rt Hon Sir Timothy	Willetts, David
Scott, Rt Hon Sir Nicholas	Winterton, Mrs Ann (Congleton)
Shaw, David (Dover)	Winterton, Nicholas (Macc'f'ld)
Shaw, Sir Giles (Pudsey)	Yeo, Tim
Shephard, Rt Hon Gillian	Young, Rt Hon Sir George
Shepherd, Sir Colin (Hereford)
Shepherd, Richard (Aldridge)	Tellers for the Noes:
Shersby, Sir Michael	Mr. Timothy Wood and Mr. Derek Conway.
Skeet, Sir Trevor

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House welcomes the fact that, in the past year of severe drought in many areas, normal water supplies have been maintained with only limited restrictions, in contrast to 1976 when supplies were cut off for large parts of each day for over 1 million people for nearly two months; notes that under public ownership the water authorities did not invest sufficiently in infrastructure, causing pollution of beaches and the sea, high leakage rates, and drinking water of significantly poorer quality than today; notes that since privatisation in 1989 the water companies have invested over £17 billion in greatly improving their operations, efficiency and service to customers; notes the assessment of the Environment Agency that the measures taken so far by the private companies should be sufficient to maintain supplies in the coming summer, even if it is very dry, with limited further restrictions; notes that those companies have since last autumn put in hand more than £400 million of investment to ensure supplies; and commends the water regulator, the Environment Agency (and its predecessor, the National Rivers Authority), and the Government for the action that they have taken separately and jointly to enable the companies to meet their supply obligations both in the short and the longer term.