HC Deb 01 July 1997 vol 297 cc91-3
3. Mr. Hutton

To ask the Secretary of State for the Environment. Transport and the Regions what estimate he has made of the extent of water leakage in the north-west. [4666]

12. Mr. Goggins

To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement about water leakage in the north-west. [4675]

The Deputy Prime Minister and Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott)

According to the Office of Water Services figures for 1995–96, North West Water lost about 34 per cent. of the water put into supply through leakage and Chester Water about 23 per cent.

Mr. Hutton

I thank my right hon. Friend for his reply. Does he accept that my constituents and people throughout the north-west are deeply concerned about the scale of the problem and about the lack of any effective action by the previous Government to deal with it? I congratulate him on the action that he has taken so far and urge him to continue to exert the maximum pressure possible on water companies in the north-west to deal with the problem.

Mr. Prescott

I am grateful for my hon. Friend's response. We intend to do everything we can to reduce leakage. The tremendous loss is paid for by the consumer and water, which is an essential and valuable resource, is lost. At our summit on 19 May, we gave the companies three weeks to reply to the 10 points about how water can be used much more efficiently and how leakages can be reduced. They have all responded. We are considering their replies and I hope to report to the House shortly.

Mr. Goggins

Is my right hon. Friend aware that, in my constituency, North West Water is currently losing about 56 gallons of water per day per property through leakage, and that even if it hits its target for leakage it will still be losing 46 gallons per property per day? Given that United Utilities made a profit of £440 million last year and that boardroom pay has increased by 268 per cent. since privatisation, does he agree that it is time for a radical shake-up of priorities?

Mr. Prescott

I certainly do. That is what the water summit was about. The proposals that we made and the 10-point plan will achieve that. I hope to report to the House shortly. I visited New York recently—last week, in fact—for the UN summit and used the occasion to speak to the authorities there. Their leakage rates are less than 10 per cent. and they use technology produced in this country, so I see no reason why we cannot achieve such levels.

Mr. Brady

Will the right hon. Gentleman join me in applauding North West Water for its investment in combating leaks? Will he particularly applaud the extension for a further year of the free leak repair service, which has already tackled 15,000 leaks on people's property? What assessment has he made of the damage that may be done by the windfall tax to the investment in combating leaks?

Mr. Prescott

I think that judgments about the windfall tax should be made after the Chancellor has made his Budget statement tomorrow, but it is totally unacceptable that water companies have such high leakage rates. Their investment is insufficient and their profits are, in many cases, far too great and not justified. That is why we held the summit. We are entering positive dialogue with water companies to see how we can get better and more efficient use of water. As soon as I have come to conclusions on that, I will, as I have told the House, report back.

Mr. David Davis

Since the Secretary of State says that investment is insufficient, will he tell the House what was the level of investment in the water industry in 1989, before privatisation, and what it is today?

Mr. Prescott

I am quite prepared to say that, under all Administrations—Labour and Conservative—the approach to capital investment in our nationalised industries was totally inadequate due to a number of Treasury rules that were pursued at the time. I inherit a problem of privatised water companies having the highest leakage rates of any water authority in this country and abroad and I intend to make a change, as it is totally unacceptable. The investment equation is one part; the commitment to do something is another. After reaching our conclusions, I hope to repair some of the damage that has come about as a result of water privatisation, for which the Conservatives were responsible when in government.