HL Deb 16 March 1880 vol 251 cc1086-93

on rising to call attention to the present position of the Metropolitan ratepayers who consume water, with reference to the charges which are and may be made by the Water Companies; also to ask, Whether the Government will take steps to ascertain (1) if the Companies are correct in law in interpreting "annual value" to mean "gross annual value;" and (2) if each successive revaluation of the Metropolis under the Metropolis Valuation Act, 1860, would alter the rateable valuation of Metropolitan property in respect of the water supplied by the Companies? said, he was very sorry to call their Lordships' attention to the subject of Metropolitan Water Supply; but, under the present circumstances, he felt it absolutely necessary, in the interest of the ratepayers, that some representations on the subject should be made to their Lordships. The introduction of a Bill on this subject by the right hon. Gentleman the Secretary of State for the Home Department, coupled with its withdrawal, had placed the ratepayers in such a position that he very much feared, unless some step was taken with reference to their interest, their position would be found to be worse than at present. He was not going to weary their Lordships by going into the general question of water supply, or the quantity or quality of that supply, which had been entered into before in that House, and which had no direct reference to the point now before him; but he was going to limit himself entirely to the rating powers which were possessed by the Water Companies, and to call their Lordships' attention to that. It might be necessary that he should remind their Lordships that the Water Companies held their powers under Acts of their own, and that their legal charge consisted of a certain percentage upon the annual value of the house which they supplied. Those powers were confirmed by the general Act of 1847. At a much later period, the Valuation (Metropolis) Act of 1869 was passed with reference to an entirely different state of things, and was introduced without any special reference to the Water Companies. It was introduced to provide for local government and taxation, and to promote uniformity of the assessment of property in the Metropolis. As the charges made by the Water Companies were in the nature of a charge made for supply, and not in the nature of a tax or rate, he believed it was questionable whether the Water Companies were justified in increasing their rates under the Valuation Act. By the Valuation Act of 1869 it was enacted that the Metropolis should be re-valued at periods of five years; and he must trouble their Lordships by reminding them that when the Valuation Act of 1875 had just passed, and nine or ten months before it came into force, he pointed out that if the Government did not take some step to prevent Acts which were not intended by Parliament to apply to Water Companies from applying to them, the result would be that the Companies would come under the provisions of that Act, and the charge to consumers of water would be increased without any change in the quantity or quality of the supply. On that occasion, his observations received scant reply from the Government. Indeed, the noble Duke opposite (the Duke of Richmond and Gordon) did not agree with the view he took. The noble Duke said, in the first place, that it was impossible before the lists were finally approved and came into force to say whether the rateable value of pro- perty in the Metropolis would be raised or not so as to affect the water rate; and, secondly, that it was not intended by Government to confer any additional powers of rating on the Metropolitan Water Companies. The noble Duke said that, although most of their Lordships knew at the time that the revaluation of the Metropolis had been completed and had been very largely increased, and that the Companies would claim the benefit of it, unless there was a special provision to prevent them from doing so. With regard to the second answer which the noble Duke had given, he had no doubt that it was never intended to confer additional rating powers upon the Water Companies by the Valuation (Metropolis) Act. But whatever might have been the intention with which that Act was passed, the Companies claimed to base their rates on the new valuation, and thus to throw an additional charge upon the consumers of water. It was clear, from the remarks which were made at the time to which he referred by the noble Marquess the Secretary of State for Foreign Affairs—the cause of whose absence they all regretted—that either the Government had not then considered this question very carefully, or else that their views had considerably changed since. The noble Marquess said— As to taking the supply out of the hands of the Companies, such a policy at the present day would be Utopian."—[3 Hansard, ccxxv. 1733–4.] And yet that was exactly what the Government had just proposed doing. The fears he (the Earl of Camperdown) had then expressed had, unfortunately, proved to be only too well founded, and the Water Companies had either raised the rates or had claimed to have a right to raise them, and they maintained their right to do so, and would probably claim to be paid for the unexhausted right to raise those charged in future; and, therefore, in calculating the price to be paid to the Companies, this increase in the rates, either actual or prospective, would have to be taken into consideration. Passing on to the present time, he would not enter into the details of the Government measure which had just been brought forward in the other House, because he did not desire to introduce controversial matter into the discussion. The Bill, no doubt, had been introduced with the best intention; but it was the general opinion throughout the Metropolis that the compensation to be paid under it to the Water Companies was excessive; and, therefore, it had been found necessary to withdraw the measure, because it certainly could not have been passed through the other House of Parliament. The Bill having been withdrawn, in what position did the ratepayers find themselves placed at the present moment? The Companies retained, and probably would exercise the right which they claimed to raise the rates. He would remind the House that they were approaching the second quinquennial period, when the property in the Metropolis would be again re-valued; and the result would be that the Water Companies would claim to still further raise their rates, and when another attempt was made to buy up the property of the Companies they would demand to be paid for this further increase in its value. He should like to ask the Government whether, in these circumstances, they proposed to take any action in favour of the ratepayers? In order that this question might be looked upon as a practical one, he would suggest one or two ways in which the Government might take beneficial action for the protection of the ratepayers. In the first place, the Companies interpreted the expression "annual value" to mean "gross annual value." Their right to place such an interpretation on those words had not hitherto been brought to the test, because individual ratepayers were afraid to enter into expensive litigation with a number of wealthy Water Companies. It might be said that the ratepayers should defend themselves in London as they had done in other towns; but the answer was obvious—the state of local government in the Metropolis—there was no body to take up and try the question. He, therefore, asked the Government whether they had taken, or would take, legal opinion on the question whether the Act of 1869 really applied to the Water Companies, and whether they would introduce a Bill declaring that that Act was not intended and should not apply to them? He could assure the House that he was actuated in this matter by no hostile feeling towards the Water Companies, whom he wished to see treated with justice and fairness; but it was monstrous that extra burthens should be thrown upon the ratepayers in a way never intended by Parliament. He begged, in conclusion, to ask the Question of which he had given Notice.


remarked that the noble Earl opposite (the Earl of Camperdown) had brought forward this subject not for the first time. The noble Earl had said, with justice, that the provisions of the Act of 1869 were not intended to apply to the Water Companies. The question of the water rates had nothing to do with that Act, but depended entirely upon the terms of the Water Companies Acts, which were Private Acts obtained by the Companies; it was in these Acts that the term "annual value" appeared, and they levied their rates by virtue of these Acts. The question, then, was—What was annual value? The Valuation (Metropolis) Act did not affect that question. If it had never been in existence they would have been entitled to charge upon annual value, proving it in any way they could; although, of course, the Returns made under that Act might be used by the Companies as evidence of what that annual value was. With respect to annual value, that was liable to fluctuate with the decrease or increase of the value of property; and though, no doubt, a periodical valuation afforded very important evidence in determining it, it did no more, and the Companies were legally in the same position now as before 1869. They all knew that property in the Metropolis did increase in value; and so long as the Companies enjoyed the powers conferred upon them by Parliament under their special Acts he did not see any way of escape from the present state of things. He was in hopes that the noble Earl, who had come forward in the character of Portia, would have devised and suggested some ingenious mode of avoiding giving to the Companies the pound of flesh which they demanded. It would, however, be a strong measure to rescind what Parliament had already granted. They were in possession of those powers for better for worse; they had raised a large amount of capital, and had expended large sums under those powers. He would not say Parliament could not do it, for, of course, Parliament could do anything; but this he would say—that there was no precedent for Parliament acting in such a manner. The decision of the question, "What was annual value?" was left to the Metropolitan magistrates, and might be raised by any ratepayer who thought himself aggrieved, and the magistrates had hitherto decided it in the sense mentioned by the noble Earl. Up to the time of the passing of the Summary Jurisdiction Act of last year there was no appeal from their decision; and, in fact, no appeal had yet been made on the subject to any Superior Court. The noble Earl had spoken of expensive litigation; but the raising of the question before a Metropolitan magistrate was a very simple and inexpensive matter. He thought he had shown the noble Earl that the increased charges to which he had referred and of which he complained were the result of periodical re-valuations. They might or might not be excellent things; but they had no bearing upon the present question. The noble Earl said that if the action proposed by the Government were taken, the last position of the ratepayers would be worse than the first; and he referred to the Bill recently introduced to the House of Commons by Her Majesty's Government. Well, the question of the Water Supply of London, and the control and regulation of that supply, was not a new question. Many important alterations were made in the year 1852, and a very effective system of control was then established. That control was increased and extended by the Act of 1871, and the history of that Act was very remarkable. In the early part of the Session of 1871 a Bill was introduced which contained, among other provisions, one for the compulsory purchase of the undertakings of the Water Companies. The Bill, even in those days of heroic legislation, met with such opposition that it was withdrawn, and later on in the Session another Water Bill was introduced without the provision in question. As he had said, the Government of 1871 hesitated to proceed with a Bill containing provisions for compulsory purchase; they abandoned their measure, and no effort had since been made to obtain such powers. That being so, he was sure their Lordships would see how difficult the question was, and how almost insuperable the obstacles were which lay in the way of obtaining a provision of the kind. The abandoning of the proposal to take compulsory powers had led to great embar- rassment in the subsequent dealing with the question. He would not inquire into the history of the second Bill of 1871, which subsequently became law. It was enough to show that the Government of the day were obliged to abandon the provision to which he had referred. The Bill which Her Majesty's Government had introduced this Session had, no doubt, been withdrawn; but the attention of the Government to the matter had by no means relaxed, and he ventured to say that it was one of the earliest subjects which would engage the attention of the new Parliament. A great deal had been said as to what the noble Earl called the enormous compensation which was proposed to be paid to the Companies under the Bill; but he (Earl Beauchamp) thought that a great deal of exaggeration had been imported into the discussion of the question. It be borne in mind that in 12 years—a small time in the history of a great question like this—a very sensible relief would have been afforded to the ratepayers in respect of charges for water under the scheme had it become law. A question of this magnitude, involving the supply of one of the first necessaries of life to a population of over 4,500,000 people, scattered over an enormous area, must be dealt with in a large sense, and necessarily required the use of machinery and money on a most extensive scale. In the Bill the first step had been taken of bringing the Companies and the ratepayers face to face on terms of mutual agreement; and he believed the more it was considered that more would be said in favour of the scheme than they hitherto heard. He had, he thought, shown the noble Earl that his Question was based upon a misconception; and he did not think the noble Earl had pointed out any practical means of remedying the evils of which he complained.


said, that the great disadvantage under which the Metropolis laboured with respect to water rates and the quantity and quality of the water supplied arose from the defective principles on which the present supply was provided. For many years the question of a constant supply had been considered and debated in many of our largest towns; and he trusted that in any legislation that might take place in the future on the subject provisions would be inserted by which a constant supply would be secured. He did not wish to say anything ill of the dead; no doubt the Bill which had been withdrawn was a bonâ fide attempt on the part of the Government to bring about results which they were all desirous to see—the purchase of the Water Companies, on fair terms, for the Metropolis. At the same time, he thought it was to be regretted that the absence of the constant supply to which he had referred, together with, the slack and neglectful performance of the duties entailed upon them, had not been insisted upon as items of diminution in the price to be paid to the Water Companies under it.

House adjourned at a quarter past Seven o'clock, till To-morrow, Two o'clock.