HC Deb 19 November 1996 vol 285 cc827-8
10. Mr. Pearson

To ask the Secretary of State for the Environment what representations he has received following the publication of the Office of Water Services' report on the financial performance and capital investment of the water companies in England and Wales in 1995 and 1996. [3127]

Mr. Gummer

None. However, I welcome the fact that the report shows that capital investment in the water industry has remained high—far higher than before privatisation. At the same time, the regulator has encouraged companies to reduce their costs and to improve their efficiency.

Mr. Pearson

Is the Secretary of State aware that Severn Trent's profits have virtually trebled since privatisation, and customer bills have rocketed by 44 per cent. more than inflation, but investment has been cut every year since 1991–92? Is he also aware that, since privatisation, Severn Trent has paid absolutely no corporation tax on its mainstream sewage and water businesses? Does that not amount to a double whammy on consumers and taxpayers in the west midlands?

Mr. Gummer

I am aware that, when the water companies were nationalised, they spent an average of £1.6 billion on investment; in comparable terms, they now spend an average of more than £3 billion. The hon. Gentleman should recognise that the mess that was left behind because of public ownership of the water industry has now been cleared up and that people are coming from all over the world to ask British water companies to do their water improvements.

Mr. Hawkins

Will my right hon. Friend join me in welcoming the news that, as the result of the huge capital investment by North West Water, the sea off Blackpool's beaches has now been greatly improved and that tourism businesses will benefit dramatically from the good news of Blackpool's beaches now being approved under European Community standards? Is that not a further demonstration that the Labour party's carping criticism does not reflect the reality of real investment to help Britain's tourism industry?

Mr. Gummer

I am certainly pleased by the clean-up of Blackpool's beaches, which was not possible when the water industry was nationalised. I hope that my hon. Friend has noticed that the former Labour leader of Manchester city council wrote to the Canadian authorities to try to undermine North West Water's bid to help the water industry in Canada—again hitting out against the British water industry, British jobs and British investment. I hope that the Labour party will dissociate itself from its prospective candidate for Manchester, Blackley.