HL Deb 11 May 1967 vol 282 cc1588-601

3.9 p.m.

Order of the Day for the Second Reading read.

LORD HUGHES

My Lords, I beg to move that this Bill be now read a second time. The cardinal feature of this Bill is that it transfers the functions of some 200 local water authorities to 13 new regional water boards. This is not change simply for the sake of change. It is a measure which the Government put forward as an integral part of the modernisation of Scotland, the urgency of which cannot be over-stated in relation to economic growth. The Bill makes changes which will take the water service out of an administrative framework which has altered very little in the past century and which is so unsuited to modern needs that it cannot be allowed to continue even for the few years until the Royal Commission on Local Government has made recommendations. A new administrative basis for water supply—one which will serve present needs and all foreseeable future needs—is needed now. I should like to develop this theme briefly before describing the Bill itself.

Water supply in Scotland has for many years been wholly a local government service. There are no private water undertakings. The local water authorities have, on the whole, served our needs well. Some of them can stand comparison with undertakings anywhere in the world. This must not be allowed to blind us to the fact that many, because of inadequate financial and technical resources, are no longer able to keep pace with rising demands for water. The pattern of course varies throughout Scotland. In the past, local water authorities were able to meet immediate needs from sources close at hand. Some can still do so. In many parts of the country the demand for water is now such that it can be met only by developing the more distant sources, and the heavy costs involved must he kept within reason by the maximum degree of co-operation.

Slum clearance, the construction of vast new housing schemes in the overspill areas and in the new towns, and better living standards, have all increased domestic demands. It is the extraordinary requirements of industry, however, which have created the real problems of water supply, which must be solved if our economic plans arc not to be frustrated. Some industrial processes use enormous quantities. To take just one example, in Grangemouth water consumption has risen since the end of the war from about 2 million gallons a day to about 15 million gallons a day, nearly 90 per cent. of which is for industry; and during the next decade the demand is expected to rise to 25 million gallons a day. Scotland can he particularly attractive to large water-using industries because of the huge reserves of water which it possesses; but these new industries will not come to Scotland unless the water can be made readily available to them. The problem is to create the organisation which can develop the sources and bring the water where it is needed. We believe that the Bill does this. It will establish a water service that is geared administratively, financially and technically to meet all the demands which are likely to be made on it.

The Bill implements the recommendations of the Scottish Water Advisory Committee, made in a series of four Reports since 1963, and covering the water service throughout Scotland. The Committee drew attention to serious shortcomings in the service, and said that many of these arose from its being in the hands of too many small water authorities. I would be among the first to recognise that efficiency does not go hand in hand with size. But about 100 of the 200 present water authorities supply populations of less than 5,000, and I think we must recognise that such small authorities will usually find it easier to improve their water supplies in a wider combination.

In their fourth Report last October, the Scottish Water Advisory Committee recommended that legislation should be introduced as soon as possible to provide for a regional water service. This was hardly a surprise to us, because the principle of regionalisation had been recommended in the Committee's first Report on Central Scotland in 1963, and both the previous and the present Government had accepted it and had been making efforts—unavailing efforts, as it turned out—to secure the establishment of regional boards under a procedure prescribed in the Water (Scotland) Act 1946. That is the backcloth against which the Government present this Bill. It has been fully examined and debated in another place, and its general principles have been accepted on all sides.

I turn now to the main content of the Bill. Clauses 1, 2 and 7 provide for the establishment of 13 regional water boards which between them will cover the whole of Scotland. The region each board will serve is detailed in Part I of Schedule 1. It is not to be expected that everyone will agree on the ideal way of dividing Scotland into regions for water purposes. There has been a great deal of discussion over this—in the Scottish Water Advisory Committee and with the local authorities as well as in Parliament—and in another place disagreements over the boundaries of three of the regions, the North, the North-East and the East of Scotland, were taken to Divisions. We shall he able to discuss them in detail during the debates in your Lordships' House. For the moment, I will content myself with two I observations: the regions must be large enough to enable the boards to provide an efficient service, and particularly to enable them to command the services of adequately-qualified water engineers; and the boundaries between regions should wherever possible follow natural divisions between catchment areas—that is to say, the tops of hills—rather than existing county boundaries.

The boards will be responsible for the supply and distribution of water for their regions. In general, they will be responsible for all headworks, treatment works and distribution mains—that is, for the whole service, from source to tap, even where the source is situated outside the region. But some of them will obtain some of the water they require from the water development board, to which I shall refer in a moment, or from other regional boards. Each board will be autonomous within their own region and will have direct access to the Scottish Office. They will come into existence on dates to be appointed by orders made by the Secretary of State—most, if not all of them, before the end of the year. This will allow time for the boards to settle in. to appoint their staffs and to make other necessary arrangements before the functions of the present water authorities are transferred to them. We hope that this transfer of functions will take place at the beginning of the local authority financial year on May 16, 1968.

Apart from fixing these appointed days, some administrative matters of a relatively minor character will be dealt with by orders. These include the membership of the boards (Clause 7). special financial arrangements in appropriate cases (Clause 11(5)) and consequential amendments of local enactments (Clause 29). Clause 30(4) requires that there should be consultation with the local authorities concerned before any order is made. This consultation process has already started. A senior officer of the Scottish Development Department has had meetings in eleven of the proposed regions with representatives of the authorities. Arising out of these meetings, the local authorities in each region are now consulting together about the administrative and financial questions which will have to be settled before the orders can be made; and they have also undertaken to consult together about any water supply proposals which arise in the next year, to ensure that they will fit into the regional pattern.

Clauses 3, 4 and 8, with Part II of Schedule 1, establish a water development board for Central Scotland and define the board's area and functions. The board's area will cover the seven most populous regions—about 80 per cent. of Scotland's population. As with the regional water boards, the Secretary of State is to determine by order matters such as the date on which the Central Board will come into existence and will take on functions under the Act.

The Central Board's main functions will be to co-ordinate the development of new sources within the central area and to manage those water schemes which are designed to supply two or more regional boards. The Central Board will supply water only to regional boards and not direct to consumers. But from the beginning the Board will be responsible for the Loch Lomond and Loch Turret schemes, which eventually will supply up to 120 million gallons a day, and inevitably will play a key role in the strategy of providing for the water requirements of industry in Central Scotland.

Clause 5 provides for changes of detail which may be required in the future within the framework established by the Bill. It enables the Secretary of State, by order, to alter the boundaries of regions, or to create entirely new regions (for example, by combining two regions, or by reorganising three to form two), and to establish boards for the new regions. It also enables further water development boards to be established if needed, and the areas of water development boards to be altered. The procedure relating to orders under this clause is set out in Schedule 3. It is more detailed than that applying to other orders under the Bill; it provides for notice of proposals to be published, an opportunity for objections to be submitted and, if the objections are not sustained by the Secretary of State, for the draft order to be approved by a Resolution of each House of Parliament.

Clause 6 specifically requires boards to consult together and to collaborate in matters of common interest. The regional boundaries have been drawn by reference to physical considerations but this does not mean that there is no need for cooperation between boards; as I have already mentioned, some boards will give bulk supplies across their boundaries to neighbouring boards as a regular arrangement, and encouragement will be given to the linking up of the mains of neighbouring regions so that, even though water is not normally moved across the boundary, it will be possible for regions to help each other out when needs arise through, for example, a sudden upsurge of demand in one of them.

The main financial provisions relating to boards are contained in Part II of the Bill. Householders will still pay for their water by rates; but premises which are wholly metered will, as a matter of convenience, no longer require to make part of their payment through the domestic water rate. Regional water boards will requisition from local authorities in whose area they supply water—that is in Clause 11. One effect—I think a desirable one—of regionalisation is that there will be a levelling out of the wide disparities in water rates which exist at present. Clearly, however, the ratepayers in a low-rated area should not be suddenly faced with an unduly steep increase in rates. So subsection (5) of Clause 11 enables the Secretary of State to include special financial arrangements in orders, where the normal basis of requisitioning would be unreasonable or inequitable. In the first instance, the local authorities in each region will consider among themselves what special financial arrangements may be necessary; and the Secretary of State will be disposed to accept any reasonable arrangement which has the support of all the authorities in a region. Clearly, however, if there is a difference of view between constituent authorities, the Secretary of State will have to consider all the factors and decide on an arrangement which is in his view reasonable and equitable to all the authorities.

Clauses 12 to 15 provide a means for the water development boards to recover their expenditure from the regional water boards in their area; the method of requisitioning is to be embodied in an "apportionment scheme" which requires to be approved by the Secretary of State, but the Bill states a general principle which schemes are to follow—the requisitions are to be proportionate to the quantities of water supplied and expected to be supplied to boards over a period. Part III of the Bill contains provisions under which assets and liabilities of the existing local water authorities will transfer to the boards, and Part IV contains a number of miscellaneous and supplementary provisions.

My Lords, while Scotland is blessed with abundant water resources—sometimes, but not always, abundant when we want it—it will never harness these resources efficiently and economically under the present administrative structure in which responsibility is fragmented among so many separate water authorities. Responsibility must be placed in the hands of units which are financially and technically strong, which can command the best engineering skills, and which are capable of serving the industrial needs of Scotland. The proposals in the Bill have been accepted by the local authority associations and individual authorities themselves are already anticipating the transfer of functions by the consultations to which I have referred. I can, therefore, commend the Bill to the House with an assurance that its principles enjoy wide acceptance.

Moved, That the Bill be now read 2a—(Lord Hughes.)

3.25 p.m.

THE MARQUESS OF LOTHIAN

My Lords, I should like first to thank the noble Lord, Lord Hughes, for explaining the provisions of this Bill with his usual clarity. I should also like to endorse that the Bill commands general acceptance, in principle, on all sides of the House. As he pointed out, the climate of Scotland is such that a great deal of water falls, at any rate on one part of it, but, nevertheless, it is increasingly essential, in view of the industrial development of our country, that these supplies should be efficiently conserved; and what is more important, I think, that supplies of pure water should be properly preserved and conserved. Therefore, I should like to tell the noble Lord straight away that we on this side of the House accept the general principle behind his Bill quite wholeheartedly. I do not wish to keep the House for very long this afternoon, as I suspect that noble Lords have their eyes, if not their hearts, on the forthcoming Recess. But there are one or two points that I should like to make concerning the Bill.

As the noble Lord said, there has been a great deal of discussion both inside and outside Parliament regarding the number and geographical divisions of the new regional water boards. Indeed, passions have been aroused on this subject in certain parts of Scotland. I think, personally, it is right that the present 199-odd water authorities should be drastically reduced. I can only hope that the number 13, which is what we have now arrived at for the new water boards, will not prove to be unlucky.

I have reservations concerning the proposed inclusion of Orkney and the Shetlands in the North of Scotland Water Board, and I am not convinced that the North-East Board could not profitably be divided into two. I do not want to argue these matters this afternoon, although I think it is probable that we shall return to them in the Committee stage. What I think is important is that before the appointed day the Secretary of State should be absolutely satisfied that the regions are, as it were, right. I understand and appreciate that under Clause 5 of the Bill the Secretary of State is taking power to alter the regions and, indeed, to create new boards; but my own feeling is that, in practice, once the present boards become settled it is not going to be at all easy to alter them. I think therefore it is extremely important that before the appointed day everyone should be satisfied that the regions are the right regions, and that the divisions are reasonable and equitable to all concerned.

My Lords, may I mention a small point here in connection with Clause 5. As I understand it, at the moment there is no provision for any sort of inquiry in the case of objection to any scheme that the Secretary of State may put forward. I feel myself that in the public interest, and to safeguard the rights of the general public, it would be better if there were included a provision for a public inquiry in the case of objections which are not withdrawn. After all, I think this is so in the case of planning legislation, and I do not see why it should not be so in the case of water legislation under this Bill. I am not saying that it is something which would happen very often, but I feel it would be better if such provision were made.

My Lords, I wish now to say something briefly about the composition of the boards. I understand that some of the smaller counties and water authorities are a little troubled in case their representation will be swamped by the larger authorities. I have no doubt that this is something which the Secretary of State will take into account, but I think it worth mentioning and I hope that the noble Lord, Lord Hughes, will bear the point in mind because I think it is a genuine fear.

Secondly, I feel that it is very important that there should be on each board one member, at any rate, who has professional knowledge of the needs of industry regarding water. The same, I think, may be said to apply in certain areas to the question of tourism and the hotel and catering industries. I doubt whether the ordinary local authority member of a board would have this knowledge. The Secretary of State may well be aware of the problem, but I thought I would mention it and ask the noble Lord to take note of it and pass it on to his right honourable friend.

There is another question on which the noble Lord did not touch much. It refers to staffing. I understand that there is a considerable shortage of water engineers and trained and skilled staff generally. Added to this there is the difficulty, which exists at any rate in some of the smaller authorities, that the water engineer undertakes all sorts of other duties as well, such as looking after lighting, sewerage and roads. I wondered what proposals the Government had in mind to deal with this problem, which is a very real one. I should be grateful if the noble Lord would say something about that when he winds up the debate.

I do not intend to say anything about finance this afternoon, except that I was glad to hear from the noble Lord, Lord Hughes, that the Secretary of State realises that the transitional period will be a difficult one and that some form of arrangement, either with the local authorities or the Scottish Office, will have to be made if some of the more drastic consequences of the levelling up of the water rate between rural and urban areas are to be avoided. The only worry I had was that I saw in the Explanatory Memorandum to the Bill that it is not considered there will be any extra call on the Treasury. I hope that any expense the Secretary of State may have to incur in this bridging finance will not be at the cost of postponing urgent schemes. Perhaps the noble Lord could say something about that as well.

My Lords, I have one further point to make: it concerns the duties of boards, a matter which the noble Lord did mention. Under Clause 6 they will collaborate and consult with each other. I have no quarrel with this, but I think it would be very desirable that the new boards should be required to consult with other boards working to some extent in the same field—I am thinking particularly of the river purification boards. After all, apart from the need on which I think we all agree, to have good clear pure water, these boards have been in existence for some time and have acquired a good deal of experience and technical knowledge, which I should have thought would prove very useful to the new boards. One might say the same to a certain extent of the Hydro-Electric Board. I have no doubt that the new regional boards will consult the river purification boards, but I feel that it is something which should not be left too much to chance and that it would be better if it were written into the Bill.

There are many other points which one could raise, but I shall not attempt to do so this afternoon. I have already spoken for too long, and I apologise to the noble Lord for "hopping about" over his Bill in something rather less than chronological order. But in conclusion, I would say just this. We sometimes hear a lot of talk about excellent enterprises—as indeed I think this is—but I feel that sometimes we fail to put into practice what we preach, because we have not always thought the thing out from its foundations. That is why I have put forward some of these points; not only because, in my view, they are important not only for the efficient working of the Bill when it becomes an Act, but because I feel strongly that the members of the boards and their staffs, and all the people who will be concerned with this legislation, should feel that they have a good Act to operate. Certainly, as the noble Lord says, modern Scotland needs a modern water system, and this Bill, though not, I think, absolutely perfect, goes a very long way to achieve that. Therefore I hope very much that it will receive a rapid Second Reading in your Lordships' House.

3.36 p.m.

LORD HENLEY

My Lords, I agree with the noble Marquess, Lord Lothian, that this Bill is generally accepted by both sides of the House, so that I do not wish to say very much on that aspect. I should like, however, to air one issue with regard to the Bill which has not very general acceptance. When the Water Resources Act 1963 went through your Lordships' House I argued at all its stages that it was a great mistake to put Cumberland in with Lancashire: I thought this the wrong sort of "marriage". I got nowhere. I argued the matter on Second Reading and again during the Committee stage, and, as I say, I came up against a blank wall. Sometime later, the noble Lord, Lord Inglewood (as he is now, though at that time he was in another place), managed suddenly to push the matter just over the edge and achieved his object. The Minister gave way, I think because he felt that the arguments were sound. I hope that the same thing will happen regarding what I have to suggest to-day.

My right honourable and honourable friends in another place feel that the same sort of mistake is being made in this Bill with regard to Orkney and Shetland, which the noble Marquess mentioned a moment ago: the same sort of administrative mistake which was originally to be made in the 1963 Act about Cumberland and Lancashire. It is a mistake: Orkney and Shetland cannot be put in with Caithness and Sutherland. This Bill proposes to do for Scotland more or less what the 1963 Act did for England, and I think that the advantages of that are self-evident. Everything it does in other respects is good. I entirely agree that the greatest benefit to Scotland from the present Bill will be that it reduces the ridiculous number of 199 different little water authorities to a total of 13. I agree that it has taken something like twenty years to reduce the number even to 199, for originally the total was about 208, or something like that but now that we are to reduce the number to 13 we shall achieve something.

Nevertheless, it seems to me that there are exceptions. Where you have isolated places like Orkney and Shetland, or the Hebrides and the Western Isles, special problems arise, and they cannot be treated in a uniform manner. Some of the problems with regard to the Western Isles and the Hebrides have apparently been solved, although possibly with some anomalies; but the difficulties of Orkney and Shetland do not seem yet to have been solved.

My Lords, these difficulties were argued at great length in another place, and there was a feeling among my honourable friends that the Minister was accepting their arguments and was going to give way; or, at any rate, was prepared to review the problem again. However, that did not happen. The difficulties have also been the subject of long and difficult negotiations in Scotland, and it appeared at one time that a compromise had been reached. Unfortunately, it fell through. It might be supposed that this is very much a "parish pump" issue, but I do not think so. It would not have been listened to and argued with the care and attention it received in another place if it were; nor, indeed, would it have attracted the amount of support among all Parties that it has attracted if in fact it were not a point of real substance. It is a difficult administrative problem and there is much to be said for both sides of it. I suggest that the Government are finding the easy way out by proposing to go back to the recommendations of the Scottish Water Advisory Committee. These proposals are neither the recommendations of the Institute of Municipal Engineers nor the original recommendations of the British Waterworks Association.

I admit that from all accounts Caithness is one of the most go-ahead water authorities in Scotland, one of the strongest, and has an extremely good record, but I still do not see that that is a good reason for putting Orkney and Shetland with it. Orkney and Shetland are an area with totally different problems. It is not an area which in any foreseeable future is going to be one of industrial growth. The islands are remote. The distance from the North of the Shetlands to the South of the Orkneys is half the length of England. There are dozens of islands. The existing trans port links are not with Caithness, but with Norway, Inverness and to some extent Aberdeen. It is half a week's job to attend a meeting on the mainland.

The noble Lord, Lord Hughes, pointed to some of the arguments that have been put forward for this amalgamation, without actually mentioning Orkney and Shetland in the course of his speech. One of those arguments is that nowadays it is impossible for a small authority to get technical advice. I do not accept that argument. It is argued that it is expensive to go outside and get the advice of consultant engineers. I think it was suggested that Orkney and Shetland had spent too much money in the past getting advice from consultants; therefore, they ought to be in one big set-up where it would be unnecessary to go to outside consultants. I am not sure that I accept that argument.

A great deal is said about how difficult it is to get water engineers and how they are not available to join these new authorities. I suggest that one of the reasons why they are not available is that we are asking too many engineers to go into too many different set-ups. It is much better to go on using the services of the large consultant firms. When you want legal advice, you go to a large and important firm of solicitors. It is not necessary to have your own solicitors and consulant engineers. Because an authority like Orkney and Shetland have to go outside for their technical advice, this is not necessarily a waste of money.

Another argument is that a small authority cannot be a viable one. Is this really true? It is currently fashionable to suppose that no small business can be viable, but surely this depends on the field in which it operates. There are fields where the mosaic of mini-patterns are best served by a mini-authority on the spot rather than by a supposedly more viable machine three days journey away. It seem to me that in Orkney and Shetland, where there are these dozens of islands, small-scale water supplies and all the difficulties of communication, a mini-authority may well be the best one. I entirely agree that it is only in exceptional circumstances that one can allow a small authority to remain in being to-day, but I suggest that here there is a reasonable exception.

I agree with the noble Lord, Lord Hughes, that we cannot wait until the review of local government comes out to make up our minds about what happens in Orkney and Shetland, because the need to get on with the reorganisation of water supplies is too urgent. I admit that the Minister and the Government have tried hard to achieve some sort of solution which would be acceptable not only to the Scottish Office but also to the people in Orkney and Shetland and other countries concerned; but, having failed, they have thrown their hands in and have gone back to their first paper thought. I wonder whether they would not be willing to have another look at this, after having asked themselves whether large-scale set-ups are necessary in all cases and whether in this case something rather smaller would not meet the requirements very much better.