THE WATER INDUSTRY IN ENGLAND AND WALES

HL Deb 26 May 1976 vol 371 cc268-342

2.48 p.m.

Baroness WHITE rose to call attention to the Consultative Document Review of the Water Industry in England and Wales; and to move for Papers. The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. At the outset may I say how delighted I am that my noble friend Lord Wilson of High Wray has chosen the occasion of this debate to make his maiden speech. He has quite outstanding experience and qualifications in certain aspects of this matter, and I am sure that we all look forward with the closest interest to what he is about to say to us. I will say frankly that I had rather hoped that the debate on the Consultative Document, Review of the Water Industry in England and Wales, might perhaps have come a little later than today because interested parties have until 31st July to make their views known to Her Majesty's Government. However, the exigencies of the Parliamentary timetable made it quite clear to me that it was better to take today when offered than wait to a little later on for a day which might never come.

I confess that the Green Paper which is the subject of the debate is not perhaps the easiest or most helpful of these documents to have come our way. It seems to lack precision in a number of essential particulars. A Consultative Document should to my mind set out alternatives with the arguments for and against various options so that those concerned have a fair opportunity to reach considered conclusions. This is not always done in this appropriately coloured green document. Propositions are made without being adequately argued so that one cannot follow the lines of thought behind the conclusions. One is left to guess at them and certain essential factors have been left, perhaps inevitably, for subsequent consultation.

How could one comment intelligently, for example, on paragraphs 26 to 29, without any indication of Departmental thinking on how a new national navigation authority is to be financed, which anybody who knows anything about the subject will realise is absolutely of the essence of the problem? I cannot give the Paper as high marks as I would wish, which I regret because coming as it does only three years after the substantive legislation, the Water Act 1973, and only two years since the consequent reorganisation took effect, one requires some very cogent argument for pulling things up by the roots quite so soon. Apart from the problem of water charges, to which I shall refer later, the main justification for change lies of course in the deficiencies of the Water Act 1973. The central point on which everyone whom I have consulted is agreed is that we need a National Water Authority as proposed in the Green Paper for strategic planning and that such an authority must have powers of initiative and the ultimate sanctions which are clearly described in paragraph 25.

When I was responsible for leading for the then Opposition on the 1973 legislation, my voice was one of very many, regardless of Party, which urged that such duties should be given to the Water Resources Board, which had the knowledge, experience and prestige needed for the job. With an obstinacy which I have never been able to understand, the then Government turned a deaf ear to friend and foe alike and refused to budge; the Water Resources Board was disbanded, its ablest members left the public service and its dismembered parts were redistributed, so that in this most important respect—that of central and national strategic planning—early reappraisal was essential and is very much to be welcomed.

Ministers are of course ultimately responsible, but the proposed National Water Authority will be able to take a broad synoptic view and, where necessary, it will also have the powers to oblige regional water authorities to comply with the requirements of the national strategy, subject to a right of appeal by a regional authority to the appropriate Minister if it feels dissatisfied with the requirements of the national authority. I assume that it is intended that the plans will he made public and that any representations under paragraph 18 of the Document will also be public. In Wales of course they will be subject to discussion in the proposed Welsh Assembly, though its jurisdiction will not extend to matters which cannot be decided in a context limited to Wales alone. If the matter goes beyond the boundaries of the Principality, then it is only right and proper that other authorities should be concerned, too. So this part of the Consultative Document seems to be very sensible and entirely acceptable.

Situations can arise where interventions in the national interest may be needed: the great Craig Goch Scheme in the Upper Elan Valley is one instance. It has caused some stress between the Welsh National Water Development Authority and the Severn Trent Authority, but this I believe has been largely resolved. However, there is still room for argument as to whether one should proceed at once to build for the longer future, or whether one should wait for a second stage when the water will actually be needed. This involves third, possibly fourth and even fifth parties among the regional water authorities and, in the event, a national umpire could be required. I give this as one example of the full justification to my mind of this part of the report which, so far as I know, is non-controversial.

Similarly, there is general agreement that the organisation of water authorities on a catchment area basis has proved its worth and should remain undisturbed. If adjustments in area are later to be made then this principle should still certainly be maintained. But when we come to some of the other proposals in the Document, I confess that I find them rather less convincing. Having given the National Water Authority some semblance of power on long-term strategic planning in two of the sub-paragraphs, the first and second of paragraph 18, the balance of authority is then sharply shifted in the next sub-paragraph, which deals with medium-term plans, with the five-year rolling programmes so dear to the Civil Service, and, again, in paragraph 24, which is concerned with the capital investment programmes for the water industry. Here the National Water Authority is to have no powers, as I understand it; it becomes advisory only.

The regional water authorities are to submit their plans and programmes and investment proposals simultaneously, on the one hand to the National Water Authority and on the other to the Department. What is to be the relationship between the two sets of boffins, one in the National Water Authority and the other in the Department? The Green Paper conjures up in my mind a depressing vista of an endless interchange of memoranda, of more and more time spent in conferences, of water authorities having to make their case both to the National Water Authority and to the Department, possibly with an annual grilling by both, and with two sets of officials all going over the same ground, or perhaps I should say through the same water.

In Wales of course the situation will be further complicated, and with the Welsh Assembly responsible for matters within the Principality, with the Secretary of State for Wales I presume responsible for inter-territorial problems, in concert I suppose with the Department of the Environment, the possibilities of proliferating bureaucracy seem rather daunting. One can surmise some of the reasons for the attitude taken in the Green Paper, but they are not frankly and openly argued in the way they should be. No justification is adduced for this particular form of parallelism and one should therefore ask whether this is the best form of administration: is it the best way to employ highly skilled and experienced manpower? I can only say that I am not entirely convinced that it is. Therefore I have some queries about part at least of the proposed major structural alterations.

When we come to the next section, paragraphs 19 to 22, on research and data collection, we reach an area of relatively much less magnitude, but I find that this is causing considerable anxiety among those most closely concerned. I am not happy about this section. I have been to considerable pains to try to find a common mind among the scientists, the customers—which include of course industrialists, consultants, engineers and the like—and the people responsible for administration. I find that they are confused and uncertain about the validity of the proposal made that the present Water Research Centre should be " absorbed ", as the Green Paper describes it, by the new National Water Authority.

Your Lordships will be aware that the Water Research Centre is a recent amalga mation, since the 1973 legislation, of the former research association and what used to be Government sponsored research facilities. It has hardly settled down after a traumatic reorganisation. Further changes in the near future would, I am sure, be strongly resented by scientific and operating staff, who would have to be given very good reasons for any further disturbance in their conditions of work and service. Of course, it may be said, though it is not said in terms in the Green Paper, that all that is intended is a change in the control structure at the top. At present, I must confess, to an outsider the Water Research Centre seems to be somewhat overgoverned, and that there are elements of a power struggle is obvious. But these factors in themselves are not sufficient to justify the bland proposal that the National Water Authority should forthwith absorb this newly reorganised research centre on the ground that planning and research are closely connected.

Of course this arrangement would look nice and tidy on paper, but research linked with water is extremely diverse and complex. It touches a multiplicity of interests among the users of water, not just the suppliers. The 10 water authorities are the main subscribers by a long way to the current organisation and they, or the National Water Authority on their behalf, will continue to be the major source of finance and, consequently, of direction. But no one concerned both with our broad national interests, including the needs of manufacturing industry, which contributes between a third and a half of the total revenue of the water authorities, and with the need to sustain the interests of our revenue-earning plant manufacturers, water engineering consultants, and contractors overseas, can read paragraph 21 of the Green Paper without misgiving. The indications seem to be that the new set-up is likely to be introverted and under the thumb of the more powerful water authorities, with inadequate regard for the wider interests of water users or those who provide water-connected services of many kinds. Nor is there any hint of work beyond the United Kingdom which can, and should, become increasingly important. I am not suggesting that a membership organisation, as at present, is necessarily the best form of organisation. What I do say is that far more profound thought is needed than seems to be indicated in this scrappy paragraph before one disturbs the newly-formed research organisation yet again.

Until the National Water Authority knows just what its need will he surely we can pause. The National Water Authority will meanwhile have in the existing Water Research Centre research capacity to its hand, which can be extended or modified as required. The Water Resources Board (now defunct, but which had a very considerable reputation in its time) was able to deal successfully with the main functions proposed for the new National Water Authority, in particular with strategic planning, without relying on in-house research. It contracted for it in the most appropriate quarters where it could be found. This seems to me a much more satisfactory pattern for operation. I feel that one is on solid ground in proposing that this transfer or " absorption " should not be consummated forthwith, but that the status quo should be maintained, at least for some time to come. I am sure that this would be the wiser course.

If, later, in the light of experience a change of relationship is really needed, very careful safeguards must be included to ensure that the organisation is outward-looking, not introverted, and with full recognition of the fact that research is at least as important to the multifarious users of water as to those who supply it. The paucity of argument in the Green Paper has, I know, caused considerable uneasiness, and I believe that this proposal should be very carefully reconsidered and not rushed. Beyond administrative tidy-mindedness there is no need for urgent change, and damage could be done to the national interest if we were overhasty.

These difficulties which I have described in relation to research do not seem to apply to the Central Planning Unit: that is simply to return where it belongs, and I should suppose that to be entirely acceptable. On data collection, which is covered in the next paragraph, paragraph 22, it is not clear to me why two separate collection systems are required, as is suggested—one run by the Department of the Environment, as at present, and the other by the proposed National Water Authority. But the dangers of duplication are at least recognised and should be capable of solution, provided that there is a genuinely open-minded approach to the matter.

I now come to the section covered in paragraphs 26 to 29 where I am, I must confess, in some difficulty because I am a member of the British Waterways Board, which is the subject of these paragraphs, and I am therefore inhibited from any detailed discussion of the matter. I revere the memory of Lord Addison, but his rules are sometimes excessively inconvenient. I can perhaps permit myself to point out a factual error in paragraph 26. Of the 2,000 or so miles of waterway managed by the British Waterways Board, nearly 1,600 miles—a much larger proportion—are navigable, rather than the 1,000 miles indicated. This is a rather surprising error by the responsible Department, which also fails even to mention the commercial use of canals for freight. When we discussed the Board's position in 1973, it was agreed that the canal system, which cuts right across river catchment areas and is quite different in nature and character, does not fit in with the pattern for river administration. This is just as true today as it was then, and I was delighted that the Minister, Mr. Denis Howell, reaffirmed this in another place as recently as last night. So that debate, I trust, is closed.

Uniform registration and a national navigation code can be achieved perfectly well without fragmenting the canal administration. But without proper financial arrangements, not least for the vast areas of maintenance work which have accumulated, no viable integration can be achieved: so the Government should cherish no illusions on that point. On the further matter of keeping two advisory bodies—the Inland Waterways Amenity Advisory Council and the Water Space Amenity Commission—referred to in paragraph 29, I cannot, of course, speak for the board. But I have other connections with waterways' users and the consensus of view appears to be that one at least of these bodies should disappear. There is some concern, however, that if both are to go, and the Sports Councils are substituted, they would not adequately cover conservation, wildlife and amenity interests, nor, possibly, those of the commercial providers of leisure services connected with the waterways.

No doubt other noble Lords will wish to discuss the proposed membership of the national and regional water authorities. I have found no one who is happy with the notion that some chairmen of regional water authorities should serve on the National Water Authority in rotation. This seems to me to find favour nowhere. Everyone, I think, feels that it should be either all or none. But, my Lords, ought there to be any at all as full members? Surely one could argue that the National Water Authority, as conceived in the Green Paper, should be and should be seen to be above any regional battles, and concerned always with the overriding national interest. How can its advice to Ministers be unbiased if among its own members are protagonists, including some pretty forceful characters, pressing the needs of their particular authorities?

That the chairmen of the regional water authorities should have the fullest access to the National Water Authority of course goes absolutely without saying, but paragraph 35 seems to me to exemplify the ambivalence of thought which characterises the different subsections of paragraph 18. Perhaps I am being obtuse, but it is not plain to me, other than in the sphere of strategic planning, that in establishing a National Water Authority the Government are clear themselves as to what sort of animal they really want. I look forward very much to enlightenment from my noble friend.

This uncertainty brings me to another point which worries me, and that is the existing dual function of the water authorities in relation to pollution. They are the guardians of water quality, and at the same time, as sewerage authorities and handlers of industrial and agricultural waste, they are also polluters, sometimes on a quite considerable scale. They cannot prosecute themselves except on some very special occasions, when 1 understand they might be able to do so through a complex process with the aid or consent of the Law Officers of the Crown. The state of the sewage works taken over by the regional water authorities on reorganisation, in certain areas at least, was quite horrifying, and no one can blame them for not having caught up. I am told that in some places, at any rate, the retreating councils who were being deprived of this function were so indignant that records were destroyed and even some machinery was removed—so intense was the feeling. Nevertheless, the water authorities are now in a position of being judge and jury in their own cause, and the temptation to be lenient with oneself when one is judge in one's own cause is ever present.

In the new multi-disciplinary divisional set-up being adopted by many water authorities, the same man at the top of the divisional administration can be responsible both for guardianship and for the polluting offence. There could also conceivably be connivance widi some industrial undertaking, too difficult perhaps for the district council environmental health officer to tackle. The Green Paper is silent on this problem, which exercises the minds of a number of people. Is the National Water Authority to have any duty of surveillance or of inspection? if not, and more desirably, are the Government going to adopt the recommendation of the Royal Commission on Environmental Pollution and establish a comprehensive national inspectorate for pollution—HMPI (Her Majesty's Pollution Inspectorate)— which would cover water as well as atmospheric and other pollution areas? Something is certainly needed, and it would be extremely helpful if we could be told what the Government thinking on this may be.

Finally, my Lords, there is the whole matter of water charges. I have left this matter to the last although I believe it is probably the major reason for the appearance of the Green Paper, and I have done so for two reasons. First, I am sure that many noble Lords who wish to speak in this debate are far more expert than I am in this field. Secondly, I am Welsh, and therefore I could not speak on this matter of water charges without emotion and partiality. It is a subject which concerns us too closely. Even with the proposed and very welcome changes in the treatment of historic debt and the like, for which we are grateful, I understand that Wales will still be left paying more for the water it produces than will be paid by most of those who receive it from us. My Lords, need I say more? I will leave it to others, who perhaps are less biased than I may be in this direction, to analyse the proposals, the very extensive proposals, the very important and very interesting proposals, contained in the Green Paper.

A further reason for my hesitation at entering into the financial field is that I have only very recently received an extremely interesting study, prepared by the present National Water Council, entitled Paying for Water. I do not pretend to have digested it fully, and that is a further reason for leaving this matter in hands more capable than mine. But I hope I have said enough to indicate how very important the consultations on this Green Paper are, and how glad I am that we in this House have this opportunity to make our contribution to the debate and to probe in areas where we feel, as I have indicated 1 myself feel, we are not satisfied with the arguments put forward. If my noble friend Lady Birk does not attempt to give all the answers, I am sure we shall entirely understand. This is an early stage in the consultations. As I have said, the 31st July is the closing date for receiving memoranda or other representations from interested parties. So I think it would be inappropriate for my noble friend even to attempt to answer everything that I or other noble Lords may have raised. Nevertheless, she may be able to throw some further light on Government thinking, for which I am sure we shall all be extremely grateful. My Lords, I beg to move for Papers.

3.17 p.m.

Lord SANDFORD

My Lords, I should like to express my thanks to the noble Baroness, Lady White, for introducing this debate. I do not believe she should apologise at all about its timing. I think that in a process of consultation ending at the end of July it is entirely appropriate that this House should be debating the subject. But that is not to say that I think the Document itself is appropriate or timely. I share very much with the noble Baroness, and with almost all the correspondents with whom I have been in touch in preparation for this debate, a feeling of perplexity as to why we are having this upheaval at all. If there are reasons for it, they are not in this review. My correspondents seem to be as perplexed as I am. That is not to say that the regional water authorities and the National Water Council have not got problems. These new authorities are still grappling with immense teething troubles. The 10 regional water authorities have been formed out of 1,400 separate fragmented bodies dealing with all these problems, and it is no wonder that they are still in the throes of reorganisation.

On top of that, and unforeseen when we enacted the Water Bill, they are operating at a time of one of the most acute financial and economic difficulties that this country has encountered for many a day. As I have said, they are taking over an immensely mixed heritage, and some of the sewage works which they now have in their hands are, or have been, in an appalling condition. Fourthly, they are now dealing with the worst drought we have had for years. So certainly. there are problems; but that any of them arise in any serious degree from the structure with which this document deals is not brought out, either in the correspondence that I have had or in this Consultative Document. One would have thought that Her Majesty's Government could have spared the industry from these furl her tribulations. One would have thought that it could have been left to settle down, complete the reorganisation and deal with the very serious practical problems that face it. However, I think there is comfort to be had from the fact that the main units which the Water Act 1973 introduced—the regional water authorities—have been left virtually unchanged.

I should like to follow that criticism with a very warm welcome to the attitude that that shows in the Government. It is reassuring to know that Her Majesty's Government recognise the basic values and virtues of the main new units established by the Water Act 1973, the regional water authorities. It is comforting to know that they share our view that it has been right to base the design of the industry upon the river basins, that the national geography of the rivers must govern the size and shape of the water regions. In their own Consultative Document, this green document, from which I quote, they put this quite emphatically: The management of the water services must be organised on the basis of hydrological areas. It is therefore welcome to know that Her Majesty's Government accept the implications of that, namely: There are very strong arguments against any further radical changes either in the authorities' powers or in their areas. I very much welcome that and strongly endorse it. The regional water authorities are here to stay and we must build on the foundations there laid and strengthen them.

In that connection, I must record disagreement with the noble Baroness and say that it is because these are so important and must be strengthened that I would not hesitate in having the regional water authorities' chairmen as members of the National Water Authority. We are dealing with the multi-purpose management of the water in the river basins. Your Lordships will recollect the main reason for the 1973 Act and the 1974 changes; namely, that the management of all the different water services—water conservation, water supply, river regulations, land drainage, sewage disposal, pollution control and so on—was hopelessly fragmented among 1,400 separate bodies of various kinds and very variable calibre. This was to be rectified by bringing the management of all those different aspects together under the single management of one body in river basins. If change there has to be—and the Govern- ment are clearly set upon it—then I am not one to complain of a few further steps that Her Majesty's Government seem to be taking to complete one or two pieces of unfinished business in the direction of strengthening the regional water authorities and to put a few more functions into their hands, the management of certain other services which were left out in 1973.

In that connection I should like to stress that navigation is clearly one of those aspects, one of those services. The management of navigation on all inland waterways should fall mainly to the regional water authorities where it is not already in their hands, rather than to be moved, as Her Majesty's Government seem to be considering, towards the centre. This is not to say that I do not recognise that there are some matters to do, for instance, with navigation, like the licensing and registering of vessels, their inspection and a common code of navigation, which might be better—in fact, should be—handled centrally. But if you look at the highways by way of analogy, we have a single national Highway Code; we have a common set of road signs and a centralised form of vehicle licensing. But that does not mean that the roads are not best vested in, managed by and maintained by, 40 county highway authorities; and the fact that they are so owned, managed and maintained does not stand in the way of road users regarding and using the roads as a national network. So, I believe, it should be with all the inland waterways.

The present proposal as set out in paragraph 26 and in the following paragraphs (which the noble Baroness also dealt with) for a national navigation authority, seems to me to need modification in the sense that I have just described. Incidentally, if the British Waterways Board and their navigation functions are now to come into the fold of the water service industry. I think we have to remember something about the origin of the BWB; namely, that it has freight and transport in its pedigree; and those functions are nothing to do with the water industry and the water services and should be left behind in some other part of the Department of the Environment with transport, ports and docks. They are no part of the water service.

My Lords, I turn now to the centre. If it is right, as we all seem to be agreed, to concentrate so much of the main management of water upon the multipurpose river basin bodies, I believe that the corollary is clear. It is to move to the centre, to be settled there, only those issues which cannot for some reason be handled in the regions by the main bodies—merely those issues which need to be settled centrally if the regional water authorities are to function efficiently and effectively in the national interest. It seems to me that there is no virtue in this business of water, in centralisation for its own sake—and the Government give no other reason for a number of the steps they are proposing to take. We are all agreed that the river basin of the hydrological cycle prescribes where the main function should be. Let us consider against that philosophy the issues for which Her Majesty's Government are now proposing a single central water authority.

I am not arguing against that proposal; I am arguing for a rather different balance of powers from that at present proposed by Her Majesty's Government. Let us take the functions in turn. First, planning, the one to which the noble Baroness first referred. I well remember explaining to your Lordships three years ago how the establishment of ten major multipurpose authorities had greatly reduced and also greatly modified what planning needed to be done centrally—and so, indeed, it has. We no longer need anything as extensive as the Water Resources Board; but there is a job of central planning to be done involving less planning of water resources but wider planning over all sorts of other fields with which the Water Resources Board never dealt. That is mainly a matter, now, of co-ordinating the plans already formulated by the regional water authorities. In my view, it is important to be careful to avoid any overlap in the planning done by the regions for the programmes they are to execute and the planning done by the centre covering only such matters as exchanges of water between the regions, going outside the responsibilities of the individual authorities.

In paragraph 17, I read (and very much share the misgivings of the noble Baroness) about what is going to happen. We read that the National Water Authority will prepare a long-term national water strategy. That will be a corporate plan for the industry for 20 years ahead. Yet, a little further down the page, we read that these proposals form the foundation of the framework within which Ministers of the Department of the Environment would in future discharge their duty to promote a national policy for water. Reading those words without further explanation, I can see, as can the noble Baroness, that we have two separate groups of people all busying themselves in the same area. All may be well, but the words as they exist on that page at the moment fill me with a good deal of misgiving. I can see the source there of a good deal of confusion.

However, if that means that somewhere at the centre the long-term plans of the 10 regional water authorities are put together and harmonised and then presented to Ministers for their approval, that is fine. But it wants to be spelt out more concisely and precisely. What is important is that the initiative in drawing up the main components of any overall strategy must remain with the regional water authorities and therefore they must retain the main planning capability. The case for a research capability at the centre needs no arguing by me or anybody-else; there is plenty of work to be done of general application which is better done for all and for several regional water authorities at a time than by each one separately. But in as much as the greater part of all that research is, as the noble Baroness said, to be done to support and to develop the day-to-day operational work of the regional' water lauthorities, there is indeed a very strong case for the Water Research Centre having the measure of detachment that it enjoys at present.

The noble Baroness put the arguments far better than I could; but when you add all her arguments, which I have only summarised, to the work that the Water Research Centre does for agencies outside the 10 English and Welsh regions, the work it does for Scotland, Northern Ireland and for other countries abroad, the case for integration of the Water Research Centre with the proposed National Water Authority seems to me to be insubstantial and unconvincing, resting entirely, as it does, on the need for some research capability to support strategic planning. Of course that is needed, but whatever the National Water Authority requires, it can arrange with the Water Research Centre constituted and placed as it is. There is no need for it to put the Water Research Centre under its wing.

However, I agree that there are plenty of other matters for which either a National Water Council or National Water Authority are required. There is the training policy for the industry, the testing of water fittings, the promoting of efficiency in the regional water authorities, possibly an inspectorate role, developing a charging policy. That is a matter on which, as the noble Baroness says, the National Water Council has just issued a paper. It is a complex subject which is probably extensive enough for a debate on its own, but one on which I am not going to say any more because my noble friend Lord Ridley is going to deal with it. There is the collecting and disseminating of information and data; there is the advising of Ministers about the regional water authorities. There is the capital investment programme and the recommending of exchanges of water between regions. There is plenty to be done. I am not clear on what evidence Her Majesty's Government are basing the proposals here, or what evidence they have that the National Water Council is failing in any of these respects. Perhaps the Minister can cite some examples when she joins in the debate, of the failures or difficulties that have arisen from the structure. If changes are really shown to be necessary and desirable, by all means let us have them reasonably quickly and let the industry then get on with the job that it has been appointed to do.

3.34 p.m.

Lord De RAMSEY

My Lords, last time I spoke on the subject of water I got into some trouble with a number of noble Lords, noble Baronesses and right reverend Prelates. The trouble was navigation. However, your Lordships decided to allow the Anglian Water Authority Bill to proceed. I hope that when I refer presently to navigation in the Green Paper I shall be less controversial.

I must frankly admit that when I saw a copy of the Green Paper my first reaction was, " What! not another water reorganisation! " No doubt others in the industry, who are trying to cope with testing conditions in parts of the country, felt the same. Having glanced at it, I petulantly exclaimed that this should be entitled, " Nanny says ". The noble Baroness put it much more diplomatically when she said, " Administrative tidy-mindedness ". Now, having studied it more carefully, together with a plethora of briefs, and listened to Lady White's expert opening of the debate. I will try to be more objective. I find myself, not for the first time, in entire agreement with the noble Baroness. I particularly support her remarks about the disbanding of the Water Resources Board which in the water world was a tragedy.

The noble Baroness has covered so impressively the huge field of this "unique resource " involving so many interests, each one convinced it is the most important. I find therefore I can restrict myself to one interest only; namely, land drainage and flood protection. In fundamental importance—with due respect to the Water Board with which the noble Baroness is connected—in this industrial island it takes second place only to the provision of water for all purposes. That is the main object of the Green Paper, I presume, and rightly. Nevertheless, now is the moment to draw attention to a number of matters that affect agriculture and food production.

I should like, however, to refer to paragraph 86 of the Green Paper where the Government ask whether it would be fair to seek a contribution from a developer who builds in the flood plane and then demands flood protection. This has been an abuse to common sense all my life; the Dutch refer picturesquely to the summer and winter bed of a river. It is the development in the winter bed which needs discouraging statutorily unless the developer is prepared to pay for his own flood protection—not only the developer in the flood plane. but also the developer in the upland who causes flooding problems (and probably pollution ones as well) lower down. He, too, should have a statutory obligation to contribute to the expenses which he causes the authority to undertake.

The Green Paper does not invite further comment on land drainage arrangements; in fact it states in paragraphs 46 and 47 that they appear to be working satisfactorily, which I believe to be true. I presume from this that representation on the proposed National Water Authority for Agriculture—namely, one—would remain the same. Obviously, every interest would like to increase its representation. but clearly agriculture's cannot be diminished. It is difficult or impossible to alter one water function without affecting others. Take, for instance, the paragraphs covering navigation; there is much to commend a central navigation authority but provided only there is proper decentralisation to water authorities. However, whatever form of administration is finally decided on, it is necessary for the principle of river basin management at regional level to be kept. The vital needs of local control of water levels in the interests of land drainage and flood protection—I must repeat, flood protection—must remain a local responsibility.

Other matters occur to me, but perhaps not all of them are wholly appropriate. It has been suggested that if nine out of 10 riparian owners are willing to improve the water course at their own expense, the tenth should not be allowed to prevent the benefit to the other nine. I am not sure whether this should be a matter for statutory legislation or whether there are other ways of dealing with the problem, but I certainly think this should be looked at.

Also, I assume, I hope rightly, that paragraph 24 on capital expenditure would not apply to land drainage. There would seem to be no useful purpose for land drainage expenditure to be submitted and re-submitted, first to the Ministry of Agriculture where the National Agricultural Advisory Service fixes the expenditure for the total land drainage requirements, and then to the Department of the Environment. The latter Department can scarcely wish to scrutinise the expenditure, for instance, of laying tile drains for agricultural purposes which another Ministry has already approved. hope these matters may be taken into account by the Government when a White Paper is prepared.

3.42 p.m.

The PARLIAMENTARY UNDER -SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)

My Lords, I also am very grateful to my noble friend Lady White for creating this opportunity for what is obviously going to be a very full debate on the Consultative Document. In fact, by this evening I think we shall all he well marinated, but in water. The colour of the document is unmistakably Green—green not for " go", but for consultation. Decisions will not be taken until after the consultation period expires at the end of July. Meanwhile, the Government are anxious that there should be the widest discussion and this debate, I am sure, will provide constructive comment on the points the Government will be considering in coming weeks.

The Document is not entirely open-ended, as I think my noble friend recognised. The Government have firm views on how the problem should be approached. I am intervening early in the debate to give an indication of those views in order to put the rest of the debate in context. With the leave of the House, I shall hope to reply briefly at the end, dealing with the points which have been raised and giving some words of explanation.

Most people expect an efficient water supply and sewerage system. As long as clean, wholesome water emerges from their taps and sewage discreetly vanishes, they are largely content. Probably few people ever pause to contemplate the enormous and complex back-up service required to get water to the tap and to deal with sewage. It is the misfortune of the water industry to be taken for granted except when things go wrong or charges rise. Yet clean and wholesome water supply and an efficient sewerage system are basic human needs —an essential part of the infrastructure; and social development can, indeed, be charted very accurately by the develop, ment of water services. A small rural population, living in wattle huts, had no need for a complex water supply and sewerage system. A large urban population has. As more and more people have bathrooms, washing machines and dishwashers, the greater becomes the demand for water services. And as the water supply expands, so does the sewerage system. In 1926 the average per capita consumption of water per day was 26 gallons; in 1951 it was 40 gallons; and in 1975 it was 70 gallons.

Therefore, we are talking about a vast industry, which provides for the basic human needs of Britain's population and underpins the whole of industry and agriculture; this it does at concomitant cost. This industry has an annual revenue requirement of some £1,000 million. It spends about £500 million a year on capital investment. The water authorities are vast users of financial resources. In relation to the natural resources at their disposal they have extensive responsibilities. Within their areas they are responsible for the whole hydrological cycle, which includes water conservation, water supply, sewage treatment and disposal, pollution control, water-based recreation including some river navigation, land drainage, and salmon and freshwater fisheries. The problems of this industry need to be tackled in two stages. There are national problems and regional problems, as has been mentioned. Our first priority is to get the structure right at the centre. I am delighted that my noble friend Lady White agrees with the concept of the National Water Authority, which is our first proposed major change. although I am sorry that she does not give very high marks to the whole document.

The first major change is to establish the new National Water Authority, a body with teeth. I find it amazing that the Tories could have established a structure for the water industry which made it impossible to produce any real strategy for the industry. It is for this reason that there is the need for the upheaval, as the noble Lord, Lord Sandford, described it. One of the features of the Water Act 1973 was that it failed to provide the strong, cohesive centre essential for the organisation and control. Instead, responsibilities were divided between the National Water Council, the Water Research Centre, the Central Water Planning Unit and three Government Departments. It is hardly surprising, therefore, that the machinery to manage and finance these national resources is hopelessly inadequate. All this was in fact foreseeable—and foreseen by this Government when in Opposition—when the 1973 Act (led in this House by my noble friend Lady White) was unfortunately passed. The passage of time has made the gravity of the situation more apparent. To remedy this will be the function of the new National Water Authority.

The new National Water Authority will be empowered and equipped to undertake national planning, and charged with the specific duty of producing a national strategy for water services. But that strategy will have to be endorsed by Ministers. I see no contradiction in this, because it will provide the framework for the plans of the regional water authorities: and those plans will be required to conform to it. For the first time, there will be a fully integrated corporate plan. One of the aims of strategic planning is to ensure an adequate and even distribution of resources throughout the country. While water is generally plentiful in these islands, it is far more abundant in the West than the East. Therefore, the National Water Authority must not only consider the scope for inter-regional transfers to correct the balance, but must also have powers to set in train the implementation of transfers. We propose to give the National Water Authority those powers, subject, of course, to the endorsement of Ministers and the normal controls on development.

This year has already been an exceptional one for water. We have had the dryest winter since records began, followed by a dry spring. We do not yet know whether the summer will prove equally dry. but already certain areas of the country are experiencing shortages calling for special measures, and contingency plans are in hand should the situation deteriorate. A drought, as the noble Lord, Lord Sandford, stated, even if it occurs rarely, re-emphasises the need for a strategic approach to the conservation, development and redeployment of resources. This will be one of the key tasks of the National Water Authority.

The second major change at national level is the proposal to merge the British Waterways Board into the new National Water Authority. I must here apologise to my noble friend about the error in paragraph 6. This was a typing error and it occurred in answer to a Parliamentary Question in another place last week. My noble friend is quite correct. The figures should read 1,600 miles and not 1,000 miles.

I know that inland waterways is a subject dear to your Lordships' corporate heart; and this is the third time in a little over a year that I have taken part in debates touching on them. Many people feel that we could make better use of our inland waterways. The Government agree, and we propose to provide the organisational framework by which the canal system can be utilised most effectively.

In reality, I do not think the waterways can now be of tremendous significance for freight traffic. Unfortunately, compared with many of the inland waterways in Europe, they are too narrow and shallow to be economic and they have been overtaken by road and rail. Nevertheless, while their commercial use has declined, a new recreational interest in canals has grown up resulting in a tremendous increase in their leisure use, particularly for boating and fishing. The 1968 Transport Act gave the first formal recognition to this need by imposing on the British Waterways Board specific obligations to maintain large sections of the waterways to standards appropriate for cruising. But the British Waterways Board are responsible for only a part of the waterways and, as the Consultative Document says, the present arrangements are highly fragmented. Control is divided between the British Waterways Board and a variety of other bodies. Some water authorities are navigation authorities for the rivers in their regions—for example, the Thames Water Authority for the Thames—and some rivers are controlled by local authorities, charitable trusts or other ad hoc bodies. The Green Paper stresses the Government's view that there is a strong case for placing the management of most of these navigations in a new national authority.

In the 200 or so years of their existence, the waterways have also come to form an integral part of the country's water supply system; they have their spoke in the hydrological cycle. They serve as channels for land drainage, for flood prevention, for the transport of water for supply and for the disposal of effluents. Even if all navigation stopped tomorrow, a good deal of the system would still be essential. So the Government's proposals to bring the British Waterways Board into the water system, and to constitute the National Water Authority as a national navigation authority, ensures that both objectives are achieved. I am aware that there are difficulties which must be resolved before we can bring about this merger, and we are now in the process of studying all aspects of these problems, which of course is part of the reason for this consultative process.

The third major change is the proposal to integrate the 28 privately owned water companies into the water authorities. The preservation of the companies by the 1973 Water Act was illogical and, to many of us, absolutely contrary to principle. The previous Government's Act effectively took away all their independence. They now act simply as agents of the water authorities, while at the same time inhibiting the authorities from organising their activities on a rational basis throughout their regions. Anyhow, as demands on their resources rose they would become increasingly dependent on the rest of a publicly owned industry. On these grounds alone they constitute an anomaly—an anomaly which the Government intend to end.

The second stage of the operation, as I said earlier, concerns the regional water authorities which manage the whole hydrological cycle in their areas, because they are based on one or more entire river basins. This means that some have a wide geographical spread and, consequent- ly, their size and remoteness are criticised. Nevertheless, we are convinced that water management must be based on river basins, though there could be some re-arrangement of areas within this principle. However, I think we must all agree that the proper context for considering this must be within the future debate on English regions and local government.

But membership of the authorities at regional level is a most pressing issue. This is a difficult one, which raises some blood pressures. What the Government have done is to set out the various factors which must be taken into account. In a nutshell, the problem is that of reconciling adequate democratic representation, which was referred to by my noble friend Lady White, with the large size of some of the river basins. I suspect that this is one of the thorniest consultative problems, on which the response to the Government's proposals will be especially helpful, and no doubt we shall hear more about this in the debate.

The least attractive aspect of the water industry, like everything else, is paying for it. No one likes paying charges, particularly when they go up. The 1973 Water Act is quite clear and unambiguous about the financial position of the water authorities. Each water authority must set its charges at such a level as to ensure that it breaks even, taking one year with another. Bluntly, this means that if costs go up so must charges. The Government have no intention of departing from this principle. Water authorities 'will be expected to continue to pay their way. There can be no question of subsidies to the water industry. Our policy is to phase out subsidies to the nationalised industries, not to introduce new ones—especially in the context of contemporary public expenditure.

However, the Government accept that it is wrong that there should be gross disparities in the average water supply bills paid in different water authority areas. That is why, as an interim measure, we are proposing a limited degree of equalisation of unmeasured water supply charges. The equalisation scheme will be confined to historic debt incurred up to 31st March 1976 in respect of unmeasured water supply. It is the best scheme the Government have been able to devise on the basis of available information, without running the risk of distorting water authorities' incentives to manage their affairs in an efficient and economical fashion. It would be dangerous to attempt a great hop into the unknown, but it is important to take action to reduce gross disparities in the charges made by different authorities. I think we have the balance about right, but I must stress that the scheme is not intended to be permanent. This means that the National Water Authority will look at the possibility of a replacement scheme.

Obviously, the Government's approach to a debate about a Consultative Document during the period of consultation must confine itself largely to explanation. I shall now listen with great interest to the other speakers who participate in the debate, particularly to the maiden speech of my noble friend Lord Wilson of High Wray, and when I speak later, by leave of the House, will attempt to deal briefly with the points raised both by my noble friend Lady White and by other speakers.

Lord DAVIES of LEEK

My Lords, may I ask my noble friend a question before she sits down, and I speak as one who does not intend to take up the time of the House by making a speech. If we are getting a national policy for the supply of water why have we included Wales and not Scotland? I believe that for an island like this to develop a national plan for water, Scotland has to be included. God recognises watersheds, but not national differences across rivers or watersheds.

Baroness BIRK

My Lords, I think that my noble friend has leapfrogged the debate a little and, as my noble friend Lady White trod so carefully and explained about the question of Wales, I do not intend to take up that point now. But if my noble friend Lord Davies of Leek will be patient and wait until the end of the debate, I will then deal with his point together with other points which I am sure will he contingent upon it.

Lord WOLVERTON

My Lords, in her interesting speech the noble Baroness said that the new National Water Authority will be given teeth. Will it have powers to connect one region with another? As the noble Baroness, Lady White, said, there is much more water in the West than there is in the East, and will it be able to do that work?

Baroness BIRK

My Lords, I have set out the propositions and I believe I covered that point in my speech. I feel it would be most unfair to other speakers who have put down their names on a long list—and I know that a number of them have to get away—if I entered into a discussion now. So I am afraid that I shall leave that point until the end of the debate, although I note what the noble Lord has said.

3.59 p.m.

Lord FEVERSHAM

My Lords, I should like to join those who have gone before me in congratulating the noble Baroness, Lady White, on raising this topic today. The interest in the debate is considerable, and it is mirrored in the number of speakers who have put down their names on the list to speak. In connection with that, I am afraid that I have an engagement this evening of long standing which I cannot avoid. Therefore I should like to apologise now if I have to leave before the end of the debate, although I shall, of course, follow most carefully what has been said in Hansard.

This Consultative Document which we are considering today embraces a wide technical subject. It is rather difficult to know where to begin. Indeed, I approach the matter in its entirety with a certain amount of diffidence, knowing that I am completely unqualified to lend much in the way of erudition to the important topic of sewage disposal, particularly as there are other noble Lords here who know what they are doing when it comes to sewage disposal. I am told that there are no votes in sewage and I think that it would be a waste of an opportunity if we were not this afternoon to lend every encouragement to the sewage disposal experts: to wish them all the power in the world to their elbows, so to speak, on this important and unpopular subject.

I feel that I ought to declare an interest in the matter, in that 1 am connected to what I call a septic tank—or, as the Department of the Environment, the Welsh Office, and the Ministry of Agriculture, Fisheries and Food prefer to call it, with their usual picturesque command of the English language, " a cesspit Paragraph 64 of the Consultative Document is concerned with whether equalisation of charges should be applied to the supply of water only or to the general services of the water industry, including the disposal of sewage. The hearts of those of us who are not connected to the sewage mains beat a little faster when we came to the last sentence of that paragraph, which says: It is clear that the case for equalising general service charges is less strong than that for equalising water supply. But I think we have here a championship prizewinner of a warning to all ordinary mortals who allow the magic words from Whitehall to accelerate the blood through their veins, because by paragraph 80, and only the really determined individual will reach paragraph 80, we find that—and I quote: The Government recognise, however, that the sewerage and sewage disposal services provided by a water authority themselves confer a substantial benefit to the community as a whole in terms of public health and an improved environment. It has been argued that this benefit is enjoyed by all members of the community regardless of whether their properties are connected to mains drainage and that all properties should make some contribution towards the cost of these services. This question clearly cannot be divorced from the question of responsibility for emptying cesspits … for it would not be acceptable for people to have to pay both a proportion of the water authorities' sewerage charge and a substantial charge for having their cesspit emptied. The Government have therefore undertaken to consider as part of the review whether the Water Act 1973 should be amended to permit some part of the cost of sewerage and sewage disposal to he levied on unconnected properties, and would welcome views on this question. Well, I am no expert but as a humble—I am trying to avoid the word " consumer "—as a humble user perhaps I might be allowed to offer a few general observations. First of all, let us consider this matter of emptying cesspits. There is a view taken in my family, and it has been handed down through the generations, along with the title, that under no circumstances should one ever tamper in any way with the processes of nature which take place under the concrete slab at the end of the garden. I am not sure of the facts but rumour has it that the third baron suffered a heart attack and died on being told that bog myrtle had appeared to the left of the mulberry tree and that the cesspit might have to be emptied. We take the view in my family that the cesspit is rather like a bottle of vintage port and that the crust should be allowed to form without disturbance unless, of course, the cork blows. And that is a view I shall continue to take, no matter what happens in the way of legislation—statutory controls, visits from Her Majesty's Inspector of Cesspits, Orders in Council, or anything else that the machinery of the State is planning to throw at me.

However, if the owner of a cesspit is to contribute to a general sewage rate and should he be ill-advised enough to consider emptying his cesspit, I do not see why he should have to pay even a proportion of the cost of emptying it. Nor, for that matter, do I think that lie should have to bear any of the considerable financial burden of installing it in the first place. The installation arid emptying of cesspits may be a very expensive form of sewage disposal, but we are talking about equalisation and I do not think we should produce a situation where some are more equal than others. The cost of installing and emptying cesspits should be shared out among all those paying a general sewage rate, and if a majority of those are connected to the mains—well, that is just tough luck. That is just the way the cookie crumbles in the equalisation stakes.

What we have here is one of those matters of simple justice so beloved by the noble Lord, Lord Goodman. and I take great heart from the fact that this Government will go down in history for tackling that other matter of simple justice concerning the adquate recompense for authors whose books are borrowed by the general public from our libraries. Let us be charitable towards this generous and equitable Government and give them the benefit of the doubt on paragraph 80 in this Consultative Document. I am quite sure that it is not their intention in any way to use this paragraph to circumnavigate or somehow to alter the basic principles of justice behind this issue, so admirably defended in this House a short while ago. I am referring, of course, to the Daymond judgment.

In fact, while I am on the subject of cesspits, it seems to me that paragraph 80 is framed in such a way as to provoke the very faintest suspicion that owners of cesspits form in some way a privileged class of person holding a serious advantage over other mortals who are connected to the main drains. It seems to me that this is quite ludicrous and only goes to show the absurd lengths to which we are going in this country at the present time in the hunting out of and stamping upon privilege, almost to the dangerous point where the fact that a person is different in any way from the rest of the flock—whether through choice or not—is to attract a hint of an accusation that such a person is privileged: that this person, in short, should have his fingernails extracted one by one with red hot pincers.

The fact of the matter is that the cesspit owner is underprivileged, in that he does not have the privilege of being connected to the main drains. Not only is he underprivileged, but he may well be living in some danger. He may well be entitled to danger money in the fair and just society of tomorrow. I should like to draw your Lordships' attention, if I may, to that admirable book on the subject published in 1883, " Dangers to Health: A Pictorial Guide to Sanitary Defects ", which I have no doubt will be familiar to many of your Lordships. The author of this important work was Pridgin Teale, M.A., whom I dare say a number of the more senior Members of this House will recall was surgeon to the Leeds General Infirmary. Do you also recall, my Lords, the ghastly, true story contained in this volume, graphically illustrated, of the tragic end which befell the butler of a celebrated Harley Street physician, who was despatched to the cellar to fetch another bottle of port? The wretched man accomplished the route down the difficult, steep and winding staircase to the cellar. He negotiated the route across the cellar to the bins of vintage port without mishap. He selected with great care the required bottle and managed to lift it from its cradle without dropping it. He was half way back across the cellar when the paving stones parted beneath his feet and he descended into the murky depths of an uncharted cesspit. Unfortunately, it was some time before the company gathered in the dining room noticed his failure to return. I am afraid that he drowned.

I have no doubt that these wonderful new organisations we have, called the Regional Water Authorities, will tell your Lordships today that they have this sort of thing licked—that there is no such thing today as an uncharted cesspit—but I suspect that there are stately homes, which are still inhabited, with some difficulty, by the descendants of the men who built them, where even today, with all the wonders of modern hydraulic engineering, nobody knows exactly what happens once the plug has been pulled. It is likely that today the noble Duke himself will make the trip to the cellar. I do not suppose that the public would lament the loss of the odd Duke down the drains these days, but I think we should take a look at the future. When these mansions become rest homes for retired trade union officials, as I expect they soon will, then the danger surrounding the misfortune of not being connected to the public sewer will be promoted more effectively and will become a matter of greater importance for the general public.

I did not come here today to talk about cesspits. I came here to talk about navigation on our waterways, a subject dear not only to my heart but to the hearts of those millions of enthusiasts who have saved and who enjoy nagivation on our inland waterways: that splendid bunch of volunteers who make up the waterways lobby. However, I have had two good innings in the last year or so on navigation and I hope today to make a very brief contribution on this subject, other wise I suspect that noble Lords will begin to make what the Clerk of the Parliaments described as " the right noises when he addressed the Cross-Bench Peers on the subject of procedure in the House last week.

Perhaps I could begin by drawing your Lordships' attention to the excellent contribution to the recent debate on the Second Reading of the Anglian Water Authority Bill that was made by the right reverend Prelate the Bishop of London. The right reverend Prelate, as a member of the Select Committee of the House of Lords on Sport and Leisure, quoted in his speech the following extract from the Report of that Committee: At a time when navigation for pleasure on inland waterways has overtaken commercial carriage the rights of navigation cannot be allowed to rest on an antiquated basis which is becoming increasingly irrelevant. The Committee consider that the legal status of rights of way and rights of navigation over water should be reviewed and that the Government should investigate whether the de facto right of navigation enjoyed on cruising waterways can be converted into a right de jure—they note that in August 1972 according to the Consultation Paper issued by the Department of the Environment it was the Government's intention to set out in legislation clear rights for the public, in suitable craft and in a suitable manner, to navigate all commercial and cruising waterways."—[Official Report; 23/3/76, col. 605.] The first thing which occurs to me in connection with the proposals concerning navigation which have been advanced in the Consultative Document is that here is an opportunity to bring up to date the whole question of the navigation rights of the public upon our waterways.I wish today to support the Government in their proposals to look at this whole question of navigation and to encourage them in their endeavour to make some real progress, quite possibly for the first time this century, upon this issue. I have no doubt that the Government have undertaken a difficult task. I have no doubt that they will be confronted by a downpour of conflicting advice from a variety of bodies with a stake in this field. It is not my intention, therefore, to add materially to the troubles which lie ahead. At this stage I would prefer to make one or two general observations in an endeavour to over-simplify a thoroughly complex situation in the hope of clearing rather than cluttering the decks.

There are two purposes for wishing to navigate upon the waterways. There are boats which carry cargo—thus, incidentally keeping it off the roads—and there are boats which provide a popular and attractive form of relaxation for their owners or their hirers, and I should like to take issue for a moment with the noble Baroness, Lady Birk, when she expressed the view that today there was no future for commercial operation on our waterways. Not all our waterways are narrow waterways. For instance, in the North-East we have some broad waterways. I know it is a small part of the network of canals and waterways that we have, but nevertheless there is a future for commercial carrying craft on waterways.

Baroness BIRK

My Lords, perhaps the noble Lord will give way, as I think he said that he would not be here later. I was speaking about it on a large scale, and I said that we could not look to it for a tremendous increase in freight carriage. I did not mean to imply that there was no possibility.

Lord FEVERSHAM

My Lords, I am grateful to the noble Baroness for giving me the assurance that there is some possibility of commercial freight-carrying on waterways. In this country we have failed so far to grasp the possibilities of developing our waterways for the carrying of freight, and in this respect we lag far behind all the other countries of the European Economic Community. I suspect that our attitude towards the commercial- use of our waterways stems from the days when the canals fell into the hands of the railway companies, who naturally were keen on eliminating any competition to their own freight-carrying activities afforded by our canal system.

The first point I should like to make, therefore, is that any new approach to our inland waterways should aim for a more constructive policy towards developing the commercial use of our waterways. The question which the noble Lord, Lord Sandford, raised was this: should the freight-carrying activities of the waterways be the responsibility of a National Water Authority, or would they be more properly located under the umbrella of the national transport policy? My own view is that they should be dealt with as part of the national transport policy, for until such time as water transport is treated as a transport matter we shall not see any progress in this area.

I do not agree with those noble Lords who say that, broadly speaking, they like the idea of a national navigation authority, provided this means that navigation management will pass to regional water authorities. I do pot agree with that at all, largely because the regional water authorities are based on river basins. Canals, for instance, operate on a totally different principle of engineering. I think it would be absurd for the Leeds and Liverpool Canal to be maintained by two separate water authorities, one on either side of the Pennines. Who would own the reservoirs on top which feed the canal itself? It is a completely different principle of engineering.

What I should like to see is a situation where we had a national navigation authority, and to all intents and purposes I think that should be the British Waterways Board, who of course have their own regional divisions: so they are regional organisations, but they know what they are doing when it comes to navigation. I should like to see them as a national navigation authority responsible to, and possibly funded by, a National Water Authority so far as the maintenance and planning of navigation upon leisure waterways is concerned, and responsible to and funded by a commercial waterways division—it need not be very big—in a similar position to the commercial highways division in the Department of the Environment so far as development and planning of the commercial waterways is concerned.

Now, of course, we are into the realms of finance and, as the noble Baroness, Lady White, has said, this Consultative Document does not really tackle the financial aspects of creating a national navigation authority. I suspect that that is because, as usual, the Government are embarrassed at the thought of having to finance the navigable waterways at all. I will admit that these are difficult times for the economy. However, we are talking about constructing a new administrative system, and I think that we should not be put off from the task of creating a good and efficient administrative system because of immediate financial difficulties. What is required is a system which will work to the advantage of the waterways when the economic situation improves—as well as in the current economic situation.

The crucial point to be made today so far as finance is concerned is this. During the financial difficulties of the past a great deal of progress has been achieved upon our inland waterways through the voluntary efforts and fund-raising of the waterways lobby, and in the immediate future this situation is likely to continue. suggest therefore that it would be prudent for all those interested in the development of our waterways, including the Government, to ensure that everything possible is done to encourage continued and (hopefully) improved support in this area. That means allowing the voice of the volunteers to be heard at every level in the new administrative system—a matter of democracy rather than bureaucracy. In this respect may I suggest that the system of allowing navigation restoration societies to restore navigation where it has become derelict works extremely well, and that this should be encouraged. Once a navigation has been restored I suggest that the people who have restored it should have the option of continuing to manage it themselves, or of handing over its management under an agreed procedure to the national navigation authority.

I do not wish to say anything further at this point, other than to encourage all those interested in developing our waterways to approach the Government's proposals in a constructive way—and to encourage the Government not to lose sight of their objective of creating an efficient administrative structure for our waterways in the light of the constructive approaches which they are now receiving from all quarters. Let us get rid of all this hocus-pocus and the humbuggery which have surrounded navigation upon our inland waterways in this country this century. Above all, let us achieve the impossible, if we can, and create a new administrative system which does not kill the spirit of enthusiastic voluntary effort contained in the English character and illustrated so clearly in the history of our waterways, because nothing would pollute our drinking water so much as a dead volunteer.

4.18 p.m.

Lord WILSON of HIGH WRAY

My Lords, as many of your Lordships will appreciate, I rise to address you this afternoon with considerable trepidation. My mouth. I regret to say, has much in common with the problems of the Anglian and the Wessex Water Authorities and I can only hope that the Almighty will come to my help before he conics to theirs. The reason why I venture to address your Lordships today is that throughout my business career I have had considerable association with the water industry. I am not of the industry but I might perhaps consider myself in the light of first cousin. I have the greatest possible admiration for those who are responsible not only for supplying us with an adequate amount of fresh water but also for disposing of what I might describe as the contaminated water, dealt with to some extent by the noble Lord, Lord Feversham.

I propose—briefly, your Lordships will be glad to know—to deal rather more with people than with policies. I have attended a number of official openings of water schemes of one kind and another, the most interesting, I think, being the opening of the Llynceulyn reservoir scheme in Central Wales, when I had the rather unusual experience of being stoned by a number of young ladies and gentlemen drawn, I believe, very largely from the universities of the Principality who had some animus against those sitting on the platform. It so happened that I was sitting next to Sir Frank Gibbard, the architect of the buildings concerned with this particular scheme. I suggested to him that perhaps in the circumstances we should draw danger money. He said rather tersely that he would prefer to have a steel helmet. However, the ceremony was not without its compensations, because the young ladies and gentlemen sang to us very beautifully in Welsh, and extremely loudly. The volume was such that it completely drowned the rather pompous sentences of the official opener, and it meant we were able to proceed with our lunch some time earlier than we had expected.

My Lords, the water industry was in effect—and I say " in effect ", not " effectively "—nationalised by the Water Resources Act 1963 and the Water Act 1973. But I have always held that the water industry differs materially from the electricity, gas, and coal mining industries in that although the water engineer can predict with reasonable accuracy what the demand for his products is going to be, he has some difficulty in predicting the source of supply. The coal mining, electrical and gas engineers can forecast for a long time ahead where their essential raw materials will come from. I might add that, unless we have a change in our climatic conditions—and it need only be a very slight change of I per cent. in temperature, humidity, either average, maximum or minimum—the water engineer can predict over the long term.

Throughout England and Wales, leaving out Scotland which, as has already been pointed out, is not mentioned in the document, the total amount of water falling in this country is very substantially greater than the amount of water we shall require in the foreseeable future. As one eminent water engineer put it to me some time ago, there is any amount of water available; the trouble is finding holes to put it in. What the water engineer does not know is how regional precipitation may vary in the short-term, by which I mean a period of from one to five years. The fact that many parts of this country are faced this summer with an extreme water supply problem is going to bring home forcibly and in an unpleasant manner to millions of our citizens the importance of having a really soundly based water industry.

We must be certain that in future legislation is going to be an improvement and not a retrograde step. We admit there is a danger of over-centralisation, and I think that this applies very much to the team of engineers responsible for our water industry. Their problems vary enormously throughout the country. The problems of Cumbria and Kent are entirely different. The water engineers are strong individualists. Only two weeks ago I listened to a very eminent water engineer delivering a lecture on dams for the storage of water in this country. He apologised for the fact that some of the slides which illustrated this talk were rather bad, but he said that unfortunately they were taken in driving rain and a howling gale. This very senior water engineer had himself gone out to examine the dam and to decide what should be done to make it safe. I think this typified the attitude of the water engineers in this country. They do not like sitting on their backsides in plushy, deep carpeted offices, examining statistics produced by an anonymous computer; they like to be on the job, and doing the job themselves.

I was rather concerned when I read in The Times of 7th May that proposals had been made by a certain county council suggesting that if a new central water authority were instituted, it should be largely made up of elected representatives of local authorities. Would your Lordships contemplate putting the electricity industry, the gas industry or the coal mining industry into the hands of people who had been elected by perhaps between 25 per cent. and 35 per cent. of the electorate, drawn from Northumberland, Gwent, the Greater London Water Authority, Cornwall and Devonshire? Would your Lordships put such a team in charge of the water authority of this country, with the power to decide whether £500 million should be spent on purifying the waters of the Trent—it would, I believe, go a long way towards solving the problems of Anglia and the South-Eastor whether to meet the cost of two nuclear submarines to recharge the aquifers underneath London?

I consider that this review is a well thought-out document, intelligently presented. T, and many of your Lordships in this House, may not agree with every suggestion put forward, but at least it will serve as a good basis for the consideration in detail of the future of this great and vitally important industry of water supply and disposal

4.28 p.m.

Viscount RIDLEY

My Lords, it is for me a very pleasant duty to offer the congratulations of this House to the noble Lord, Lord Wilson of High Wray, who has just made a very fine and interesting maiden speech. I am sure the whole House will hope that it will not be long before we hear him speak again, and often. We can assure him he will not be stoned even by the Welsh in this Chamber, and he will never need a steel helmet, either. I should like to thank the noble Baroness, Lady White. Not long ago I made the first speech I have ever made in Wales under her benevolent chairmanship, and she said to me, " If you go on for more than five minutes, I will bring you to a halt ". I hope I shall not speak too long today. I then realised what a very valuable grasp the noble Baroness has on all environmental affairs, particularly Welsh ones.

My Lords, I did not think this was a particularly exciting subject, until the debate began. I do not pretend to be an expert in the stuff, nor do I drink more of it than necessary. My own knowledge of the new set-up is not in fact very detailed. But it has long been my view that water is one of the essential things which should have been nationalised long ago, perhaps the first thing that should have been nationalised in this country. I remember sitting next to a previous Labour Minister in a previous Government, and at the end of the dinner party I had persuaded him to introduce a Bill to nationalise water. Unfortunately, I woke up the next morning to find that this Minister had been sacked, and the Bill never saw the light of day. I have resisted the temptation to invite the noble Baroness, Lady Birk, to dinner, but I shall be delighted to buy her a glass of water afterwards. I apologise to both noble Baronesses if I am not here at the end of the debate, owing to a previous engagement.

It fell to a Conservative Government to nationalise water in all but name in 1973. This Green Paper is not surprisingly the completion of the nationalised process, prophesied by quite a number of us at that time. First, I would refer to the strengthening of the central control by the National Water Authority. I shall not cover this in great detail, because other noble Lords have spoken about it at some length. I do think, however. that we should welcome for one reason the strengthening of the National Water Authority. The need must be now for a strengthened overall strategy, and it is long overdue. An Authority which has teeth, which can say where water should be impounded and where it should be used and transferred, and not allow a proliferation of schemes, must he essential in the national interest. I think we should have moved long ago to a national water grid, just as we have a national electrical grid, and I am certain that Scotland should be included, even if we have to face up to the highly exorbitant price they charge for the stuff there.

I would turn to the 28 water companies which are going to be nationalised—I think the word used is " integrated ". One must be honest and say that one hears it said that this is done purely to satisfy Labour philosophy. No other reason is given. Although the noble Baroness has mentioned it in her speech, it is not stated in the Paper that they have been inefficient or that they have failed the nation, but they must go for the sake of Labour philosophy. I accept in my own mind that this is probably essential, and the inevitability of this was in fact written on the wall by the 1973 Act. But I wonder if the Government can be a little more explicit about the phrase they use, due regard to fair compensation ". I hope there will be no equivocation about compensation. Secondly, I think we should ask if it is really necessary to do this at this moment, when the need is not for more expenditure from the public purse, but less, and not for more nationalisation, but for less. Why do we have to do this now?

I am also glad to know that the Green Paper does not propose any alteration in the 10 regional water authorities. It would be much too soon to do this. But in view of the very vociferous cries, to be heard mostly I think in Labour circles in the provinces, that water should be brought back into local government—I am not quite sure what that means— in the context of the regional devolution proposed for England, I shall be very interested to hear how this can be done. If we ever get a White Paper on devolution for England —and I am beginning to wonder if it exists—it will be interesting to see how the water authorities can be brought into this. I hope we shall not make the regions of England, for other government purposes, comply entirely with the hydrological ones, because it would he a nonsense.

I would turn to part ll of the Paper, the policy of water charging. This is extremely difficult and interesting subject Again I offer no possibility of knowledge on this subject. I would just like to ask a few questions about it. There is a great and essential dilemma about equalisation of water charges, which I think is acknowledged in the Paper. If you make everything equal then there is no incentive to economy. If, on the other hand you do nothing, then some regions will suffer. I would first of all question the conclusion that inter-regional transfer schemes should be on a no profit and no loss basis. I wonder why this is absolutely essential. If the real purpose behind the whole of the Green Paper—and some people think this—is to tackle the problems of the enormous cost of water in Wales, then there is a very strong argument for letting Wales charge for the water it produces and sends to " the cities of the plain " and letting them recoup their costs in a commercial way. I see the noble Baroness, Lady White, is not entirely in disagreement with what I am saying.

I think it is a matter of fact that all the high rainfall areas in this country, including Scotland, the North of England, Wales and the South-West of England, are in fact those areas which are now development areas and which are badly in need of natural resources. I wonder why it has not been considered that they should sell their only natural resource to the thirsty cities in the lowland and Eastern half of Britain, and that would perhaps be some answer to the eternal problem of the deprivation and the regional imbalance in those parts of the Kingdom.

Secondly, I would ask why is it essential that only non-metered water should be equalised? Again in the regional context it k very much our experience in the North that the cost of water to incoming industry is an extremely important factor. Indeed, it can be decisive in many cases. If unmetered water is going to cost a great deal more through the rates, then I think it is wrong that the development areas should be penalised in this respect. It is interesting that the Government have suggested that water should be equalised on a temporary basis, although what that quite means I am not sure, on the historic costs to 31st March 1976. I have been trying unsuccessfully to find out what that means for the North since this was proposed. It is not easy to find out exactly what it does mean, except that I think it is fair to say that in the far North of England we have some very heavy capital expenditure on reservoir and sewerage schemes et cetera which have not yet started. It, therefore, seems unfair that the cut-off date should be quite so rigid as 31st March, although paragraph 73 seems to contradict this and talks about future equalisation schemes. I am afraid I am not clear what this means, and I hope the Government will in due course let us know. I think it would be worth suggesting that equalisation should include not only costs incurred up to 31st March but also committed costs in all the regions, in other words, commitments which are inescapably entered into at that date. In the interests of fairness, I would suggest this seriously to the Government.

Furthermore, the proposed equalization is undoubtedly unfair to the development areas in yet another way. Parliament has decided that they should be given assistance in one form or another, grants from the public purse, including some from the EEC. But equalisation as suggested here in fact takes no account of those; being based only on outstanding debt, it ignores the substantial sums which have been received in grants, and reverses in effect that policy. This historic costs argument should take account of this; otherwise the rest of the country will be clawing back some of the grants it has given and the whole theory will be negated. Furthermore, I do not think it is perfectly clear what paragraph 70 means when it talks about the proposed equalisation scheme in terms of water supply, or is it including water resources. I have found considerable uncertainty in the experts on this matter, and I hope we can have some clarification in due course.

Finally, I do welcome the statement in paragraph 58 that the industry must stand on its own financial feet. This is a breath of realism in an increasingly unrealistic world, and I am very glad, as I am sure we all are, to hear the noble Baroness, Lady Birk, repeat this statement today, even if we start paying a lot more for our water. The noble Baroness, Lady White, referred briefly to the Paper entitled Paying for Water. Like her, I have not had time to absorb it, which I think is more appropriate than digesting it. It does at some point reach the fairly inescapable conclusion that we have not been paying anything like enough for the water we are consuming. Depreciation, it says, has not been anything like high enough to replace the assets of the water industry which are wearing out. At the very best, to say the least, or at the very worst, not taking any account of inflation, at least a 20 per cent. increase in 'water charges seems likely. I hope with this in mind the gloom which I have wished to spread will not spoil the rest of this debate.

4.38 p.m.

The Earl of SHANNON

My Lords, 1, too, should like to add my congratulations to those of the noble Viscount, Lord Ridley, on the excellent maiden speech of Lord Wilson of High Wray. All your Lordships will agree he made his contribution from a wealth of knowledge and experience, which I am sure has made this debate, and will make future debates in your Lordships' House, the richer for his contributions. I myself, in speaking in this debate, must declare my usual interest. For eight years I have been concerned intimately with the work and activities of the industrial research associations in this country. But I make that declaration of interest in no form of apology. From my experience in your Lordships' House, when a speaker declares an interest it usually means that he does have some considerable knowledge of the subject, and I hope I shall be able to follow that excellent example. I ought also perhaps to declare another interest as a Vice-President of the Inland Waterways Association, but in that capacity 1 do not intend to try to compete with the excellent speech made by the noble, Lord, Lord Feversham, earlier this afternoon.

We in your Lordships' House are all grateful to the noble Baroness, Lady White for giving us a chance to discuss this Consultative Document, this Green Paper. Others have referred, and no doubt will refer, to other aspects of the document and the varying degress of excellence of its various parts. But, at the risk of repeating some of what has already been said by previous speakers, I wish to confine my activities to one particular aspect: namely, the issue of Her Majesty's Government's proposal that the Water Research Centre should be absorbed into the National Water Authority. This proposal is enlarged upon in paragraphs 19 to 22 of the document, and although this grouping of paragraph is, I would submit, given the correct heading, in that somebody has appreciated the difference between research and data collection they then, in the subsequent paragraphs, fog the whole issue by muddling it up.

If one says to a political person the word " research ", of course it can only mean one thing; it means gathering information, probably by means of a research assistant. It is done in the hope that that politician's future pronouncements, he hopes, will make some sense and be related to the facts of the case. Perhaps it is understandable that the Minister, being a politician, fortunately or unfortunately, thinks of research in that light. Hence, if I may quote from the Green Paper, we have the sentence: The National Water Authority will therefore need its own research facilities in connection with the planning duties it is to assume. In this sentence alone I think we have the evidence, if not the complete proof, of this muddled thinking. In such a context no doubt it is sensible to absorb the Water Research Centre, but it also shows what little thought has been given to what the Water Research Centre actually does. It does technological research: it does not do solely data collection for planning purposes.

I am not sure; perhaps I may be being a little unjust, and perhaps there were lingering doubts in the minds of the authors of this Green Paper that they are making a nonsense. Hence they add a little sentence: … indeed the borderline between planning and research is often artificial. Who is trying to kid who over this? Is the Minister trying to convince the Depart- ment, or vice versa? Or is the Minister trying to convince himself? It was only three years ago, as we have heard, that your Lordships' House debated in detail this subject during the passage of the then Water Act. During the passage of that Act the Department of the Environment issued an Explanatory Paper in which they gave detailed and reasoned arguments for what they intended to do at that time. These were detailed, carefully prepared, and very explicit; they utterly blow apart the sketchy little paragraphs which we get, 19, 20, and 21, in the present document.

Although most of this Departmental Explanatory Paper, to which I have referred, is directly relevant to this, I shall read, if I may, only three short extracts to your Lordships. In paragraph 14 of the Paper to which I have referred, it says: The general debate about the central planning function has by concentrating upon that relatively small part of research which is directly relevant to planning obscured both the real scope of research and the need to co-ordinate more efficiently the present fragmented research activities. This was the Departmental Explanatory Paper, so it rather looks as though they are perhaps the intended victims of this new campaign for convincement. Further on it continues: The Water Research Association was created to serve the public water supply industry not only I in England and Wales but in Scotland and Northern Ireland. Its membership includes manufacturers of plant, industrialists with water problems, consultant engineers and overseas organisations. Then, finally, in referring to the various bodies which were to be merged to make the Water Research Centre, the document says: — although much of the work of these bodies will be for the Council and the regional water authorities some of the existing bodies have a much wider range of customers—customers with a right to have a voice in determining policy. These other customers have moreover contributed to the assets of the bodies and it would not be equitable to deprive them of these assets. My Lords, try to reconcile those detailed, careful statements with the very sketchy little paragraphs and paltry statements we get in the present Green Paper. The water authorities of Scotland and Wales have already said, " Please leave the Water Research Centre as it is ". That would also be echoed by the 230 other members of the Centre, to say nothing of those on the waiting list who wish to join the Centre. Research in the water industry is not just confined to planning a supply of clean water and treating dirty water. It has far wider interests. It has the involvement of manufacturing industries, consulting firms, universities, and others at home and abroad, all of whom are concerned with water as a vital component of our total environment. In like manner, the Water Research Centre is not only concerned with the very narrow segment of the water cycle which the National Water Authority concerned itself with, although we hear now it is to undertake boating and fishing. It goes further and deeper: it covers water as a vital component of every industrial process, and the relation of water to our quality of living generally.

Why are we suddenly crying change now, after only just over two years? Small children are dissuaded from pulling out seeds and small plants to see how they are growing, and probably plant elsewhere. Can we not have some national " Nanny " to dissuade Ministers and Departments from doing the same sort of thing? Is the Centre unsatisfactory in its organisation? I shall be interested to hear any evidence which can be put out to support that view.

Again, let us look at the end of paragraph 20 where it says: …almost all contracts are placed by the Government. Why, therefore, am I making this fuss? Perhaps the Centre already belongs body and soul to Government. The outside interests are negligible. I am making a fuss because I think that that little statement is the cleverest piece of subjective insinuation that I have met fot a very long time. I appreciate that about three lines before there is inserted the small word " revenue ", referring to the subscriptions that are paid by the authorities to the Centre, and also to the other areas from which it obtains its revenue. If one is to take revenue terms absolutely, then there could be some substance in making such a statement. And, obviously, if you get a Government contract it tends to he a very big one. It will tend to swamp other, smaller industrial contracts in revenue only.

Such contracts placed by Government tend to involve many tens of thousands of pounds in civil engineering works before any research is done—getting at the water, digging holes. I suggest that to estimate the usage of a Centre, it is better to consider the number of contracts and not just the sum total of revenue alone. If we are to consider the more normal research contract received by the Centre —say, of between £2,000 and £10,000—the Government are outnumbered at least two to one. Even the revenue from Scotland and the Northern Irish authorities amounts to over 10 per cent. of the authorities subscriptions, anyway. Is that not rather a different picture from the one which states that almost all contracts are placed by Government?

The Government may ask: why has this Centre not done even better? On the other hand, it ill becomes those who live in ceramic edifices to play with projectiles. It was only two years ago that the Centre was established and the senior management effort has been for a long time on internal organisation, not research. In fact, over half the staff of the Centre has been on the pay-roll for less than a year. So please, not again—please do not start tearing the whole lot up and waste a tremendous amount of valuable effort on internal re-organisation and not on research just to please some little whim. I wonder whether some of the disadvantages of what they were intending did not become apparent to the authors of the Green Paper, who perhaps rushed to repair the intended damage. There is an announcement that members may continue to contract with the National Water Authority in respect of such research work as they may require doing, but can we really think that such contracts will be accepted on anything other than sufferance and when convenient to the main body? Is it to appease, as has been suggested, some misplaced idea of apparent administrative tidiness that one destroys the existing organisation after all the trouble on setting it up; a structure in which there is an obvious declared wish for involvement by industry and the other members? Are we to destroy all this for the sake of some misconceived idea and a complete disregard of the nonsenses that it will beget in its wake?

It may be that it is a genuine lack of appreciation between technological and statistical research. if it is necessary, no doubt it is quite easy to strengthen the existing strong links that already exist, and the liaison that exists, between the Centre and the Planning Unit. But please, let us not destroy one and its equally valuable links to achieve these other links. The present membership organisation is a highly flexible method of organisation; it is adaptable and it can evolve easily to meet new needs. Do we consider that a monolithic gargantuan National Water Authority will be so well placed?

We all know how little attention is paid even to statutory consultative committees, let alone any others, and I am sure that that is all the members will get in return for their present rights, where they have a vote in council on how the Centre and its work is financed, executed and controlled. This facet of its organisation makes the Centre unique in Europe and the Centre has not been slow in recognising this. It is fast gathering members from overseas, members who appreciate the chance of involvement in such a Centre of excellence. The Commission of the European Communities is also very interested in such a Centre and I have with me the results of but one of the contracts from Directorate-General 13 placed with the Centre. Do noble Lords think that they will be as interested in just another pseudo-Government laboratory which does not have the same wide base of membership from industry as is at present enjoyed by the Centre?

Probably it is a lack of appreciation in the Department of the two different types of research and is not perhaps just an administrative whim. However, I strongly suspect that once this decision was taken, a search was made to fabricate good subjective evidence in an attempt to support and pretend that it led to what was in fact a prejudged decision. To me, this section of the Green Paper, with its complete lack of factual support, is a classic of this type of approach. I believe that Her Majesty's Government have failed miserably to make their case. I suggest that they drop it now and not waste everyone's time in attempting to defend the indefensible, and, reading between the lines, I am not sure whether they have even convinced themselves of their own case.

4.56 p.m.

Lord SOMERLEYTON

My Lords, I too wish to add my congratulations on the fine maiden speech made by the noble Lord, Lord Wilson of High Wray. I wish at the outset to declare my interest in that 1 am a director of a water company, the East Anglian Water Company, whose area covers about 500 square miles within the boundaries of the Anglian Water Authority, which stretches from the Humber to the Thames and as far West as Northamptonshire. My company has been operating for over 120 years and has never restricted the supply of water, and its water rates and charges to trade and industrial consumers are considerably less than those levied by the neighbouring divisions of the Anglian Water Authority. Despite this—it would be churlish to say " because of this "— it is proposed by the Government that my company and all the other water companies in the country should be integrated into one or more of the regional water authorities.

The reason advanced in the Green Paper is: …the need to correct the obvious anomaly created by the Water Act 1973 in leaving substantially untouched the 28 water companies still operating in England and Wales. The 28 water companies, incidentally, supply nearly one-quarter of the country with its water, and, because they are autonomous statutory bodies operating through small boards of directors with wide experience in the water industry and in business generally, they are able to make immediate and direct decisions on all matters affecting their organisation, their consumers and their employees, being particularly sensitive to local needs. The fact that they are statutory companies obliges them to provide a public water supply for a strictly controlled financial return and requires them to ensure that any surplus from water charges is applied for the reduction of future charges. The same such limitations are not imposed on the water authorities.

When the reorganisation of the water industry took place some two years ago it was specifically enacted that the water companies should continue to operate as in the past, but in order to fit them into the new situation they had to enter into agency arrangements with the various water authorities in whose areas they found themselves. Since then there has been established a close working relation ship with the National Water Council and with the water authorities, and a growing fund of good will has materialised. Members of the staffs of the companies serve on committees and Working Parties concerned with all aspects of the industry both locally and nationally, and I have heard of no complaints from the authorities as to their efficiency or co-operation.

It is the opinion of many, and I share it, that two years is far too short a time to review a countrywide industry which was, and is, faced with so many difficult problems of reorganisation, rationalisation and integration. Indeed, it has hardly had time to get its feet wet. Be that as it may, now that the review is being undertaken I feel most strongly that to increase public expenditure at a time when most people are agreed that this should in fact be decreased, is wholly unacceptable. The present capital expenditure of the water companies is about £350 million, and this has been raised over the years on the Market at the going rate. Some £15 million to £25 million is now raised annually from the private sector at interest rates which compare more than favourably with those paid by the water authorities on money borrowed from the public loan funds or provided by Government stock.

My Lords, while the Green Paper speaks of fair compensation for the proposed integration—and this would mean the transfer of a huge new debt from the private to the public sector—it also means that every penny spent on capital works in the future must come from public funds. Is this really necessary? Surely it would be preferable from every point of view—other, of course, than that of political persuasion—to leave the water companies as they are, serving as loyal and co-operative agents of the water authorities, with no extra burden whatsoever on public expenditure.

A heavy majority of the employees—I emphasise " employees "—of all the water companies is against the Government's proposals. Indeed, my own cornpany's employees are wholly against them, and there is a general acceptance by all but the most dogmatic of the value of a mixed economy. If the water companies were to be integrated with the water authorities, there would remain no yardstick by which the efficiency or, indeed, the charges made for the public water supply could be measured, and it is possible that before long a general water service charge might emerge which could include the cost of sewerage, water supply, fishing and even recreation. Certainly the poor, long-suffering consumer would not know just what he was paying for, except that it was probably far too much.

My Lords, when the Conservative Government's White Paper on the reorganisation of the water industry was published in 1971 it stated that water company undertakings were viable and efficient, and it saw for them a continuing role. Nothing since that time appears to merit a change of view, and it is 'strongly to be hoped that there will be a great and successful opposition to the nationalisation of the companies which have served the country and their local communities so well over the past hundred years.

5.3 p.m.

Lord HENLEY

My Lords, I was very glad to hear the speech of the noble Lord, Lord Wilson of High Wray, and I am very pleased to see him here. In Cumbria we are very well supplied with water—we even export it—but we are not well supplied with noble Lords. They are thin on the ground there, and so I am pleased to see this addition to our number. I welcome the setting up of the National Water Authority. I was one of those in 1973 who, like my noble friend Lord De Ramsey, supported the noble Baroness in her regrets at the demise of the old Water Resources Board. Here we have what appears to be a new Water Resources Board; but this time it has teeth, and indeed the power to develop and implement a 20-year strategy for water. Evidently the regional water authorities are seen to have failed in this regard. Nevertheless, the proposal raises questions of great significance for the numerous interests outside the water industry, such as conservation and agriculture; and frequently these interests are conflicting. Your Lordships will all remember the passionate environmental debates over reservoirs at Cow Green, Meldon, Swincombe, and those showed how much people care about these things.

The concentration of expertise and authority in a single national agency must make for efficiency and for an altogether more rational set-up so far as technical and management judgment go, but this very increase in efficiency makes for difficulties for people who care about conservation.

There is a real danger that there will be a muffling of debate over those crucial value judgments and assumptions which must underlie any long term strategy. Those value judgments and assumptions belong very much in the public arena. They involve decisions about visual amenity. They involve such ideas as social accounting, and all these belong outside the technical efficiency of bodies like the NWA and indeed like the old Central Electricity Generating Board, which rather appears to be the pattern for the new water authority. There are safeguards. There is the proposal for a five-yearly publication of the strategy report for 20 years ahead, rather like the old Water Resources Board's report which came out just before its demise. There is a range of options within the policy field. And this would be putting the water industry well ahead of many other industries, nationalised and others, in displaying their strategic thinking to public view.

Another safeguard, one presumes, will be the insertion of an amenity section within the new Act which will emerge from this. Statutory amenity sections are rather like the statutory woman on a statutory undertaking: one sometimes wonders whether they are there only for ornament rather than for use. Since I suspect that the Central Electricity Generating Board is the pattern we will be looking to in the new National Water Authority, I fear that it has not always followed there that the statutory injunction to have regard to amenity has been obeyed. I know that complaints have been made, and indeed ignored on this score, and I am advised that the courts would be quite unable and probably unwilling to enforce an amenity section of the Act.

Hitherto a combination of Departmental review of Ministerial responsibility and Parliamentary debate has been supposed to guarantee the public acceptance for these value judgments and assumptions on which the priorities of an industry are to be based. But we all know that Parliament is often unable to do this. Success depends very much on public confidence in Parliament's capacity to reflect changing attitudes. One cannot help thinking that that confidence is wearing thin. The noble Baroness will recall what happened at Shipley the other day. I strongly disapproved of that; nevertheless it was a manifestation of the fact that people have lost confidence in Parliament's ability to scrutinise the type of question we have in mind. Indeed, Parliament is ill-equipped for this kind of scrutiny, and a very good example is the complexities of traffic forecasting. Indeed, the Select Committee on Nationalised Industries has said as much.

I wonder whether some new form of public inquiry procedure could not be devised —designed, indeed—to help Parliament evaluate these sort of things. I think that a public inquiry along the lines of the " examination-in-public procedure which is used for structure plans, producing an official report, which would provide a basis for both Parliament and the Department of the Environment to review the options, might be helpful. It is the difficulty of getting hold of these options which makes me put this suggestion before your Lordships. For example, 1 have had difficulty in trying to get out of the Central Electricity Generating Board what options are available when they are making up their long-term strategy. They are very unwilling to make their long-term strategy known. They say it is too difficult. too complex. But surely they base their finances, phased over a period of 20 years, upon a long-term strategy in which there must be different options. I think that amenity societies have great difficulty in extracting those options from them. How can Parliament or the public have confidence in the value judgments and assumptions, which as I say underly these long-term strategies, unless they have been properly scrutinised? I hope the Government will look very closely at this to see if something can be devised to achieve what I suggest is not being achieved in bodies such as the CEGB, which is going to be the pattern for the new NWA.

5.12 p.m.

Lord PEDDIE

My Lords, I am delighted to join in the universal congratulations to my noble friend Lord Wilson of High Wray, and I am certain the House appreciated the pleasant and non-controversial comments that he had to make. I hope we shall hear more of him in the future; and on those occasions, I am quite sure, judging from his reputation, he will be a little more controversial than he was during his speech today. Perhaps I may also congratulate my noble friend Lady White on giving us the opportunity to discuss this exceedingly important matter. She has already expressed quite a number of the criticisms of the Green Paper that I would have made, but which it is quite unnecessary for me to make now, and has done it in far more vivid language than I could command. But I join with her in expressing the fundamental criticism of the Green Paper that inadequate arguments are put forward to support a case for what are really revolutionary changes within the industry. I share her fears that there is a possibility, as she graphically described it, of opening up a vista of a flood of memoranda between bureaucrats. I agree. There is every possibility that damage could be done by over-hasty decisions merely in the interests of administrative tidiness.

I share those sentiments, my Lords; but I appreciate the opportunity to discuss the matter. Personally, I have no objection to the scrutiny at any time of a nationalised industry. There is an indication here, however, of further upheaval in an industry which has not yet settled down after changes that took place about two years ago, and therefore it demands very close questioning on the part of this House and another place. I suppose that at this stage I should declare a personal interest in that I have for some years been a member of the board of a water company, but I can assure your Lordships that my attitude towards the Green Paper itself is not occasioned by that fact. I would say, rather, that my fairly long experience and involvement in large-scale administration, and my knowledge of nationalised industries through my association with the old Prices and Incomes Board and current activities with POUNC, indicate that what is needed today is not the development of more monolithic organisations but the encouragement of conditions which would make for greater public accountability on the part of nationalised industry and would permit of greater responsibility to users. Those two factors are of paramount importance, and I see little or nothing in this document—indeed, nothing—that would indicate that they are recognised as problems.

I have the great fear that in the anxiety to achieve administrative tidiness, the planners' dream, it can, if we are not careful, turn out to be the users' nightmare, because I see very few checks in the organisation that is envisaged which would permit of what I feel is desperately necessary in all nationalised industries, and that is to ensure that you have the development of comparative standards by which you can judge efficiency and also a greater degree of public accountability. I think a good case could be made out for a single National Authority. That may be; but it is certainly not well argued in this document. I would emphasise that there is no single authority which would cover such a wide span of activities as that which is envisaged in the case of this National Authority. Although we were told by my noble friend on the Front Bench that this is not a Green Paper which indicates a green light, the " go-ahead ", but is an opportunity for discussion, the tragedy of it is that my noble friend went on to indicate clearly and convincingly that there were one or two points which were beyond any consideration at all the Government had made up their mind. That is not the way to approach the matter. If we are having a Green Paper for discussion, let us have the whole lot under discussion and not have areas which are reserved solely for Government decision alone.

We notice, too, that in their determination to build up this single National Authority they are eliminating any authorities that would provide a basis of comparison, as in the case of the research organisations which are in existence now; and also the water companies. It is only two years since the basic reorganisation of the water industry took place, and that was a traumatic experience, as everybody within the industry would confirm. Yet, there is now the suggestion of pulling up the plant to see how the roots are getting on. I am no gardener, but I doubt whether that is an effective way to make sure one has a good garden.

I would draw the attention of the House to paragraph 12 of this Document, which is rather interesting. It states: The Government regard it as essential that if the best use is to be made of both natural and financial resources within the water industry as a whole the industry must be provided with a strong national authority … ". As I said previously, there may be a case for that. Then it goes on to say: No less important, however, is the need to correct the obvious anomaly created by the Water Act 1973 in leaving substantially untouched the twenty-eight water companies still operating in England and Wales… They are entitled to that opinion. But they state, as I will repeat: No less important, however, is the need to correct the obvious anomaly…". In other words, the absorption of 28 water companies is just as important—and that is what the Government say—as the suggestion that to make the best use of natural and financial resources, they set up a strong National Authority. That to my mind seems to be utterly incredible.

I hate to think so, but I wonder whether it is based on some ideological objection to the word " company ". As everyone knows, the water company is not a normal profit-making organisation. It has statutory obligations that it has to fulfil and its objectives of public service are as well-defined as in any nationalised industry. That should be borne in mind because no argument is advanced, none whatsoever, that they should be absorbed. There have been no complaints from the water authorities of the efficiency of the water companies. There has been a close working relationship built up and during this present drought, if you examine the record of the water companies you will find little or no justification for criticism of their actions. At the same time to take over the water companies would increase the burden of public expenditure not only in compensation but in relation to the continuing need for capital.

May I point to another important factor not merely bearing on water but on something I hold very dear in my consideration of nationalised undertakings. In paragraph 39 one reads the fair and honest statement: Some of the water authorities are responsible for very large areas, and there have been criticisms of their remoteness. It goes on: …not all these reorganisations are yet complete. The Document states that one of the disabilities is the remoteness of the organisation from the user. We should seek in every one of our nationalised industries to ensure that the user has a more effective voice. The actions of the nationalised industries should be more responsive to their wishes. Yet what do we find? In spite of that remoteness, we have in the water companies a clear indication of their close and continuing contact with the user. Nobody denies that. Therefore, what is the point? I will go along with any continuing consideration of the water industry. But at the same time do not let us be foisted off with suggestions based on the need for tidiness.

There is a further point: the equalisation of charges—which is dear to most people's hearts and certainly dear to the hearts of those who have the interests of the user in mind. There is a not very convincing argument here. I think that to some extent we are not being given all the facts. Much of the Document deals with this aspect. I agree that it may be desirable as an objective, but it does not point out how minimal would be the effect of the proposals that have been made. I refer your Lordships to paragraph 66. There it is made clear that equalisation of charges can be a disincentive to more efficient organisation and, in my opinion, can often act as a cloak or cover for inefficiency. Therefore, one should go very carefully before dashing in for political reasons with any system of equalisation. What does it mean in fact? There are only about two areas: Wales, which gains a slight benefit and the Thames that will lose.

I have in my possession information relating to inquiries made and estimates made as to the effect if this came into being. I would ask my noble friend who will be replying for the Government to give us some indication of the extent of the change that will take place with this policy of equalisation. We are entitled to know that; because if equalisation is one of the factors which justify these considerable changes we are entitled to know what we are buying and what will be the extent of this equalisation. I think that is very important indeed.

In short, I would accept in principle that it is a good thing to work towards but let us make sure that it is not once again employed in such a manner as to restrain initiative and efficiency. Above all, we have got to seek, not only in our nationalised industries but in the private sector too, constantly to improve our efficiency. If, I think, we spent as much time in dealing with the nuts and bolts of operational efficiency as we do in creating new administrative structures, this country would get out of its economic difficulties a great deal more quickly than if this sort of practice is maintained. That is my message to this House.

My Lords, I have no objection at all to changes in the constant scrutiny; but I hope the Government do not really mean what is said from the Front Benches: that we can have a look at it and we can pass our comments but that the Government have made up their mind on the matter. The whole thing should be thrown open to complete consideration because there are many anomalies. There is not the time to deal with those anomalies, but there is an indication that merely for tidiness they must absorb the water companies. Yet there is no proposal for the discontinuance of arrangements under Section 15 of the 1973 Act whereby district councils discharge sewage functions. There is no change there. Why are the companies pulled in? Why is this allowed to continue? I think we are entitled to know that, too.

In short, I say that I share the view of my noble friend Lady White that there are inadequate arguments to sustain the point of view expressed in this document. There is too little evidence given to the public in this document. I would hope, even though one accepts the need for continuing scrutiny, that the dominant feature would be the proper economic provision of services to the user and the building up of some administration—not if it is monolithic, but one whereby you can check, counter check and test whether the organisation is efficient or not. This is the structure that we ought to be thinking about. I hope as a result of this debate that the Government will have second thoughts about some of the points expressed here.

5.30 p.m.

Lady KINLOSS

My Lords, I must congratulate the noble Baroness, Lady White, for initiating this debate on the one mineral for which no substitute exists. In the very helpful Consultative Document, Appendix I shows the water authorities of England and Wales without any reference to the physical geography of the country which determines or is said to determine their boundaries. Schedule 2 to the Water Act 1973 requires every water authority to keep and provide facilities for consultation of maps of their respective area. Nowhere in the Consultative Document is there available a consolidated physical map which shows all the water authorities which would immediately disclose that the canal and inland navigation system crosses these boundaries again and again. While obviously numerous factors are involved, it is the fact of physical geography that commends a National Water Authority.

The British Waterways Board, a nationalised industry, controls already some two-thirds of the navigable waterways, and it seems wholly illogical that another third should be controlled by the other water authorities. If ever there was a strong case for integration, for a national water authority, there is one here. Nevertheless, it seems to me that there are three quite separate functions involved. The first is the provision of water for industrial and domestic use. and for this end the proposal for a 20-year plan for the whole industry seems commendable. I wonder, however, whether anyone can truly say that they can see ahead for 20 years, and for this reason a five year review seems sensible.

The second function is the control of inland navigation. While arguing for an integrated system, I would say that we must not lose the knowledge and expertise that the British Waterways Board has already acquired with regard to navigation and to the provision of recreational facilities. It would seem more logical if while constituting a National Water Authority that the British Waterways Board should remain as a distinct administrative part of it, autonomous within its particular sphere. This, I gather, is the view of the British Waterways Board itself and it seems to be the most prudent one.

I regretted not to see in the Consultative Document any mention of commercial freight at a time when the state of our national economy makes it prudent to use every natural resource that we have. Surely we should do all we can to encourage the transport of commercial freight by water. The Transport on Water Association, of whose General Council I am a Member, is very aware that the water authorities have no interest at all in the transport of freight and they therefore consider it totally unsuited to promote transport on water. If there is to be a National Water Authority, I consider that commercial users should be strongly represented on the Board. The remaining function is that of research which at present is carried out by the Water Research Centre. This is constituted as a research association. Its governing Committee, some 29 members, represent the water authorities and those bodies responsible for water supplies in Scotland and Northern Ireland, water companies, consulting engineers, manufacturers and major industrial users. It also includes universities and other bodies at home and abroad. There are no fewer than 40 examples of other research associations of industry in this country. I do not see any advantage in not leaving research independent, nor do I know of any reason to suggest that the present system is not working well. If something is working well, I should have thought it is best left alone.

There is one other matter that I should mention briefly. It is the staff of the British Waterways Board. This was chartered in 1968. Only three years later, in 1971, it was proposed that the Board's work should be divided among the seven regional water authorities. This idea was abandoned in 1973 because it proved impracticable. Now in 1976 their future is again in the balance. My Lords, of course this would be upsetting to any staff whatever their work. May I beg the noble Baroness, Lady Birk, to ensure that the Government think of them sympathetically and try to find a; solution soon.

5.34 p.m.

The Earl of KINTORE

My Lords, my first pleasure is to add my words of congratulation to the noble Lord, Lord Wilson of High Wray, on a line maiden speech; and my second pleasure is to thank the noble Baroness for bringing this matter before your Lordships today. Thirdly, I apologise to her, as a mere Scot, for trespassing in the realms of England and Wales. But, my Lords, I should like to suggest that as this concerns us in parts fairly vitally, how else do you get in if the Green Paper which covers your future does not say so?

I am going to confine myself to three paragraphs, Nos. 19, 20 and 21. I must declare an interest, being the chairman of the regional water services department of the Grampian Region which is an area of some 4,000 square miles. Therefore I am in fairly close contact with the problems of water and sewage more or less every day. Having said that, we are well satisfied with the service we get from the Water Research Council. They meet our requirements admirably. They are very good people to work with, and we should not like to see that situation upset. That is largely due to their structure, which works in the same way as an industrial research association. It should he preserved at all costs. Many other speakers have said that, and the noble Baroness, Lady White, said words to that effect. I should like to add my voice to hers. There are many aspects of this type of organisation which make it ideal for water research work connected with the practical field.

I will enlarge a little on the membership of the Council because this is a very relevant point. My figures are from the report of the Water Research Council for 1974–75. At that time, 9 water authorities from England and Wales, 10 from Scotland and one from Northern Ireland were members. There were 26 water undertakings in England and Wales and 13 foreign and European undertakings which were members. That is very significant. There were 38 consultants from the United Kingdom and 6 from overseas who were members. There were 50 United Kingdom industrial firms and 4 Commonwealth and overseas members, There were 45 educational research establishments from the United Kingdom, 9 from the Commonwealth and 12 from overseas. Incidentally, the manufacturing industry contributed about 50 per cent. of the W.R.C. income. This should be emphasised.

I think a " bull " point in considering the Water Research Council is that if it is sufficiently independent for the European countries and institutions to use it, that might prevent some of the higher flights of fancy of the Directives that we get out of the European Economic Community at the moment. Some of these are just not practicable. If we had the same research association sufficiently independent and not due to be a Government Department, this would help on all scores. The Grampian Region are also members of the Council. We use the research centre and have a right to have carried out any research we require. We have a voice in its running and we are well satisfied; we all get along well together. The work done is excellent and helps us very much indeed. We are very much indebted to the centre.

Somewhere this Document vaguely mentions Scotland, and I have experience of the kind of representation we might expect in a body such as the one that may be set up, because on the Industry Training Board —and I hasten to say that I have nothing against their courses. which are excellent—I represent not only my own region but also a neighbouring region. That means that one chap is representing something like one-fifth or one-quarter of Scotland. I do not think that kind of representation, if it was to be foisted upon us, is good enough. We do not object to that as regards the ITB, because there arc cogent reasons for it, but we should be objecting to it in a new set-up.

Members of the Water Research Council's staff and our own engineers work together extremely well and harmoniously. Our relations with the engineers of the Scottish Development Department are also excellent, but very much in the nature of " boss and employee ", which is not at all the same thing. About two years ago, the experience of 50 years and 40 major industries led to the then Government thinking that the Industrial Research Association principle was a fine one, and this was duly set up. I do not know of anything in the Green Paper which points out why they should have changed their views on that. If there are reasons, they certainly are not stated in the Green Paper, and therefore 1 would hope that they would tell us about these, because we do not know what they are. Before that, the water industry had had good results for 20 years, working with the Research Association. I can see nothing against it and everything for it.

A large number of problems, though not by any means all the problems involved, are common to large areas of England, Scotland and Wales, so that it is possible—and indeed quite a lot has been done—to pool research, because we all take advantage of the research that has been done. Since the " trade secret" aspect is largely absent from the water industry, this helps the Research Association, especially when dealing with foreigners, because most of the secrets are not secret anyway. I certainly think that this aspect should be preserved.

Another very important aspect, the human element, was touched upon by the noble Lady, Lady Kinloss. I have seen a great deal of this. I was a founder member of the East of Scotland Water Board when it was set up some seven years ago. Everybody was stirred up; no one knew what was happening, and the staff were busy sorting out anomalies and pacifying the irate people who felt insecure because their jobs were in danger and could not quite understand what was happening. There was, in any case, so much uncertainty that the position was very difficult. Three or four years after this, when the dust had begun to settle down, we had regional re-organisation. The dust still has not settled following that, and here we are again about to be plunged into uncertainty. The operatives and many of the engineers are fed up, and I thoroughly sympathise with them. Unless there is a really good reason why this should be inflicted on working people, engineers, technical people and so on, for some darned Departmental whim, I think it is scandalous. Therefore, my Lords, I put in as earnest a plea as I can for this matter to be looked at again.

I should also like to say that, as this matter clearly contains a large Scottish element, we in Scotland should be given a Green Paper so that we can discuss our own problems. I would ask: are we merely to be told that this is for England and so we must just follow on? We have our own particular problems in Scotland. There, of course, our river purification boards have a different identity and at this moment I am, perhaps with tongue in cheek, as a member of the river purification board, egging them on as hard as I can to sue me as the chief polluter, being chairman of the committee responsible for water services, because we are producing effluents which are not up to the Royal Commission standard. The reason why that is so is that we are not allowed to borrow the money needed to make the improvements which are required by the SDD. We tried to get out a five-year programme, which would be thought to be normal planning. We were told: " That is fine, lovely; but there is no money, and as long as you pull the plug and it disappears, that is all right."

5.48 p.m.

The Countess of LOUDOUN

My Lords, in paragraph 28 of the Green Paper, it is stated: In the Government's view, the most promising way ahead would be to merge the BWB into the National Water Authority, which would become a national navigation authority. Although most people agree that some integration would be an advantage, there is also some anxiety over the future of the commercial freight division of the British Waterways Board. I can find nothing in the Green Paper about this section.

Owing to the great increase of interest in water transport, this is an area of vital importance; and here I must declare an interest. I am a trustee and a member of the General Council of the Transport-on Water Association. This is a voluntary body founded in 1975. It is a " grass roots organisation, springing from the lightermen of London; and its objective is to promote the transport of freight on inland and estuarial waters. The joint presidents are the noble Lord, Lord Aldington, and Mr. Jack Jones; and it draws its membership from all parts of the community. It includes 37 Members of another place and nine Members of your Lordships' House, drawn from all Parties.

The British Waterways Board's commercial freight division has led the way in the area of water transport, but it has had problems, such as those connected with the BACAT system, and it does need official support and encouragement. This could be done either by retaining it as a commercial water freight body—for example, as the British Waterways Transport Board—or by creating a new body to which the British Waterways Board's freight operation could be transferred, along with their wharves, warehouses and other related assets. The water industry is monopolistic and uncompetitive. It has no interest whatsoever in the transport of goods and it is totally unsuited, therefore, to promote transport on water.

If the activities of the freight division of the British Waterways Board are allowed to fall within the water industry, it is the fear of many people that they will not receive the consideration and independent impetus which they most urgently require. What can be done to achieve closer cooperation between the transport organisations and the water industry? It has been suggested that closer co-operation might be obtained by the chairman of the former having a seat on the National Water Authority. I should like the Government's reactions to this suggestion.

I should now like to say a few words on the proposed national navigation authority. Here, again, opinion is divided. I agree that a national integrated system of waterways as water services is desirable, but I do not support the concept of a national navigation authority as such. The navigation function is quite distinct, and is related specifically to the needs of vessels and the purposes for which they navigate. As to a national licence, few boat owners see any need for this. The local nature of the many navigation authorities has proved in many cases to be an advantage reflecting, as it does, local navigation requirements, and to remove navigation powers to a new and possibly remote national authority would not, in my view, be for the benefit and best interests of boat owners.

5.52 p.m.

Lord ENERGLYN

My Lords, for me, at least, it would be illuminating to know the authors of this Document, because it is clearly not written by water engineers and hydrogeologists. For example, the Document repeatedly refers to, " national strategy ". One would imagine that we were at war with water, with barricades of paper and defences behind them, with fellow travellers reprocessing the paper pulp. But, more seriously, the Document tends to annihilate a very important and treasured possession of this country, which is the background of over one and a half centuries of research in water overground, and particularly underground. We were the first country in the world to study underground water systematically, and the archives and experience that we have built up will be, at least, or at worst, sterilised, but certainly not properly used as they are at the moment. If your Lordships would like me to remind you of the importance of this type of research, you may recall the many instances in World War One when water supplies were crucial, and more particularly in World War Two, when the faster movement of troops made this matter vital.

I thought it would not bore your Lordships if I quoted something I wrote in Discovery in 1945, to illustrate the point which I wish to establish. I wrote: Wherever our armies operated, water supplies were of primary importance, and the geologists permanently attached to our armies were engaged almost solely on this task of finding water. In North Africa, in Italy, and even in France they were not fortunate enough to have at their disposal an accumulation of fly drogeological data comparable to that available for this country. Despite this, they were able to apply the principles established by our home researches, and a high measure of success was achieved. The provision of a water supply in the Fuka Basin for our troops operating between Tobruk and El Alamein illustrates the importance of this type of work in a military operation. From the Fuka Basin the nearest supply of any quantity of fresh water was 30 miles away at Matruh, which was supplied by the desert pipeline carrying purified Nile water from Alexandria—a distance of 110 miles. Along this line there were only two military sources of supply, both of which were small; throughout the remainder of the area the water proved by boreholes was almost invariably saline. At Fuka, however, there were two Bedouin wells which yielded small quantities of fresh water. Geologists and water engineers examined this area in great detail as an extra water supply here would be of great strategic importance to our troops. About 60 boreholes, sunk in as many days, proved that the area contained fresh water above the main watertable which was almost entirely saline. It was also proved that the Bedouin wells were not situated in the place ideally suited to obtain the maximum yield of water without contaminating it with the underlying saline water. These researches located the most advantageous sites, and estimates were made of the quantity of water that could be pumped per day without impairing the continuity of the supply of fresh water. Between September 1941 and March 1942 the Fuka boreholes averaged 50,000 gallons of water a day. Then, in the retreat from Tobruk to El Alamein, these important wells were completely demolished, but all records were carefully preserved; the wells afforded no assistance to the enemy. Among the places of high strategic importance selected by Generals Alexander and Montgomery in their plans for the break-through westwards from El Alamein was the Fuka Basin, for it constituted the only supply of water that could be assured for the troops in this forward position. Thus engineers bearing boring tackle, piping and pumps followed hard on the heels of the ' Desert Rats ', and within 48 hours of the area falling into our hands a new borehole had been sunk and a water supply established. I give that as an illustration of the kind of research that will be hampered. It also illustrates the position that we occupy in the world in this subject. We are leaders in the world in underground water supply researches. Why, therefore, play around with something that is good? Therefore, I appeal—along with others, 1 hope—that in this concept of an authority we shall in no way impair or endanger the health and stature of our existing research centres in this country.

5.58 p.m.

Lord REDESDALE

My Lords, obviously, I must join in thanking the noble Baroness, Lady White, for raising this subject which has given us a chance to look at the Green Paper. Also it is a great honour to be able to congratulate the noble Lord, Lord Wilson of High Wray, on making such a notable maiden speech which I found quite fascinating. I look forward to hearing him again, as I am sure we all do.

Overall, this Document must be regarded as sensible. However, as the noble Baroness, Lady White, and the noble Lord, Lord Peddie, said, one finds on going through it that it sets the problem but does not really argue out the case. This is a little frustrating in places. For instance, the water companies are described as being anomalous. That may be true, but it must be remembered that they do a very good job at the moment. They are not like an ordinary company; they work to a very strict set of rules. At the moment, they are providing an excellent service at very fair rates. I agree that at a later date it may be sensible to tidy up the situation and bring them into the whole show, but at the moment we seem to forget that we have a major economic problem in this country. To lash out £350 million at this stage is totally unnecessary.

The other point which the noble Lord, Lord Somerleyton, made was that at this stage the water companies raise between £15 million and £25 million a year to cover capital charges. This is a feature of the whole industry. All the way down the line there is the problem of raising money, for it is a highly capital intensive industry. One of the aspects of this Consultative Document about which I am a little concerned—as are, I am sure, other noble Lords who have already spoken—is that this industry has been reorganised relatively recently. Obviously it was due for reorganisation and that reorganisation has been successful. Perhaps there are areas where the reorganisation could be improved hut, as many noble Lords have said, it would be quite wrong to stir up the whole situation now and start again. It would cause much more harm than the good which might be achieved.

This question relates not only to the question of the water companies but also to that of research. The noble Earl, Lord Shannon, made a very notable speech in which he outlined the excellent job that the Research Centre has done so far. Like the water companies, it has done an excellent job, although it has been operating for only a short time. The Centre is growing. however, and there are many arguments for keeping it as it is. I object to the reference in the Document to the NWA absorbing the Water Research Centre. That would be totally wrong. If the Research Centre could be left as an autonomous organisation with a responsibility, that would be a much better solution. The Research Centre is doing a considerable amount of work overseas and it has a special role to play in Europe. Just for the NWA to absorb the Centre would result in cutting it short at a stage of its development which would do not only the water industry but this country as well much harm.

Now I should like to turn to the subject of drought, and again there seems to be a lot of interference. The noble Baroness referred to drought as a national problem. With all due respect to the noble Baroness, although she said that drought is a national problem, it is not. It is a regional problem. In five regions there is a problem but in the others there is no problem at this stage. Therefore, to get involved with Ministers now would result in too much organisation, for only in some areas is there too little water.

One aspect which the noble Baroness raised was the ever increasing demand for water. Obviously, this is true. We ought to consider the fact that only by metering will the average consumer be in a position to do anything about the charges which he has to bear. I know that this involves a large capital cost but, as the noble Baroness said, water consumption is going up by leaps and bounds and at some point it has to be controlled. The switch-off campaign is a point in question. If you have to pay for the water you consume, you do something about it. I hope that serious consideration will be given to this aspect. It is not mentioned a great deal in the Consultative Document, but it is a point which we have to think about.

This brings me to the question of the equalisation of charges. Overall these are probably fair, but what worries many of us is the thought that if charges were totally equalised—I agree that the Consultative Document does not set out a case for total equalisation but for some equalisation, although it does not say how much—then, as the Document itself states, we should lose out on accountability. I should be very sorry if overall charges were jacked up because of a lack of accountability. There is also the question of service. We expect the water coming out of the tap to be clean and in nearly every case it is; and all credit must be given to the industry for the service which they supply. This is mainly due to the fact that the industry is answerable. Equalisation could reduce this service very seriously, and I hope that every consideration will be given to this point before we embark upon too much equalisation.

I was fascinated to hear the speech of the noble Lord, Lord Feversham, when he sailed us through the cesspits of the stately homes of England and straight on to navigation and the rights of navigation by everyday people. I feel that I am not in a position to comment too fully on this matter. However, the noble Baronesses mentioned the question of navigation and I agree very much with what they said.

There is one final area which we must think about: the question of the membership, not only of the National Water Authority but also of the regional water authorities themselves. The problem is that this is yet another enormous body, with people to be appointed to it. This happens in all the other industries as well and they are becoming vastly powerful. The National Water Authority will be a very powerful organisation indeed, controlling many people's lives. If it is a totally appointed body, the area of democracy will be eroded still further. In the case of membership of both the NWA and RWAs, very serious consideration must be given to the provision of a democratically elected element within these organisations. A certain amount of discussion is given to this point in the Consultative Document, but it would be wrong of us to forget the power which these organisations have over our lives and it is essential that this element of democracy should be retained.

After such a long and wide-ranging debate, I do not wish to say any more because the noble Baroness has many questions to answer. I hope, however, that she will give consideration to the question of representation on these authorities.

6.7 p.m.

Baroness BIRK

My Lords, I have listened with great interest to what has proved, as I think we all suspected it would be, a penetrating and wide-ranging debate on this crucial topic. I think that practically every anecdote and local analogy relating to water has been made in the debate. All that I have to say is that few wells have been left undug in examining the issues which the Government have presented for public discussion. I hope that the interest which has been displayed here this afternoon will shortly find echoes among all the others whom the Government have invited to contribute to the consultation process. For that reason alone, I believe that this debate will have served a very useful purpose.

Everybody who has spoken has testified to the importance of the subject, although, quite naturally, there was a great deal of difference of view and approach. I emphasised earlier that while we are in the consultative stage it would be impossible and entirely wrong for me to say anything about the Government's problems. For the same reason, apart from delaying everybody very much longer. it would he a not very useful exercise to argue every point that has been made. However, all of the points that have been made will be taken into account by the Government because this debate has now become a very important part of the consultative process, and noble Lords may rest assured that today's Hansard will be closely scrutinised.

There are a number of points that it is right I should mention, comment upon and emphasise. Perhaps I may start with the cornerstone of the present proposals, the new National Water Authority, of which many noble Lords have spoken. A number of speakers have questioned the need to have another review so soon after the last. But this Government made it absolutely clear, both when they were in opposition and when they came into power, from the time when the Conservatives passed their 1973 Water Act, that we thought it wrong in a number of essentials—not just on the periphery but on the essentials—and this still applies. If the Green Paper seems thin in places—as both the noble Baroness, Lady White, and the noble Lord, Lord Peddle, commented; I should have thought that was a tremendous asset—it reflects the view of the Government that the facts, the needs and the arguments have really not changed because one inadequate reorganisation has been carried through. So what this paper is doing is to keep what was good of the reorganisation and to inject into it the most important thing, the principle of a central, strong organisation.

Although we do not quarrel with the principle of river basin management, and indeed we have never quarrelled with it and there is ample evidence that the strengths this provides in terms of the comprehensive management of water resources at the regional level are necessary, and indeed are vital, it cannot make sense to ignore the functions that properly belong to the centre and upon which the adequate satisfaction of the needs of England and Wales depend. It is this which I think is the central point and which has basically called forth the most discussion.

To us on this side of the House, Section I of the Water Act 1973, which speaks of a national policy, is not merely ringing piety. Its implementation is an urgent necessity and we believe that it can be ignored no longer. I can assure the noble Lord, Lord Henley, that a national strategy will be published for comment and I have taken very careful note, but I w ill not at the moment go into detail over the other points that he made in regard to public participation and the question of the public inquiry. There is a point which I really must make in connection with the comment made by the noble Lord, Lord Redesdale, on the question of drought. I did not in fact say that drought was a national problem. It is still fortunately only regional and local, but what I said was that it emphasises the question—and this is the national question—of the need for adequate and efficient deployment of resources. I was using it as an example, and if the noble Lord will read Hansard tomorrow he will see what I actually said about that.

A certain amount of discussion, and some of it fairly strong discussion, has taken place round the whole question of research. But to strengthen the centre of the industry cannot be done without change. A number of bodies will quite naturally be disturbed by the proposals, notably the Water Research Centre. We have heard the view expressed from both sides of the House that the Water Research Centre w ill profoundly change in character if it is absorbed by the National Water Authority. This is, of course, true in a sense. This must happen when there is a change in a body and a change in the allocation of work. But the Government have said quite explicitly that they wish to preserve certain safeguards to members of the existing association, and that no final proposals will be formulated without discussion.

It is quite clear that we shall need two types of research: applied research and a research organisation built right into the National Water Authority, and if nothing is said about that I think many people will ask how an authority of this type can be set up without its own research division. We are aware of the sensitivity here and I can promise noble Lords that what has been said on research will be taken carefully into account. What the Government cannot accept is the view expressed by the noble Earl, Lord Shannon, that the National Water Authority could get the research it needs without having full control over the research programme. That is not the industry's rule, and although it may be his own opinion, to which obviously he is entitled, I really must reject his allegation that the proposal was based on ignorance. The proposal was not based on ignorance; it was based on a consideration of the industry's needs.

I have more sympathy with the anxiety and concern expressed by my noble friend Lady White, but when she referred to planning and research 1 seem to remember that when she was speaking on the 1973 Bill she herself accepted that there is often a rather thin dividing line between planning and research where in fact you need to hitch the research up to the planning policy in order to try to get that right. In any case, the tying up of research to planning was in fact a keystone of the Water Resources Board's argument. But this does not exclude other areas of research which will be done by other bodies outside, with which I not only entirely agree but think is absolutely essential.

Another highly controversial area, which was to be expected, was that concerned with the water companies. I accept the remark made by the noble Lord, Lord Somerleyton, that the water companies are perfectly efficient at present, but nevertheless 1 have not heard an adequate refutation of the fact that as time goes by the companies must become increasingly dependent for adequate resources upon the water authorities.

I think that, unusually, the noble Viscount, Lord Ridley, was a little less than fair when he said that our case was entirely based on dogma and on theory, when in fact I spelt out quite clearly that a totally anomalous situation was being created and would be perpetuated unless we did something about it. This is quite apart from the question of principle, and I think there are two things involved here. Even if one does not like the argument of principle there is a solid pragmatic argument for it, because one cannot plan, develop and manage all the resources of a region around a self-contained little package which is interested in only half the business, preserved immutable like a sore thumb in those places where private enterprise just happened to be the suppliers in 1973. There can he no autonomous growth for the companies and I think we are all aware that their existence has been an anomaly ever since the Conservatives, in the last piece of legislation, decided on a fully integrated hydrologically based structure. But I emphasise that the Government will take fully into account staff concerns, both in the companies and in the receiving authorities, and will look with much greater detail than could he expressed this afternoon when the point was raised, into fair compensation for the companies. I am sorry that at this stage I cannot be more precise about the method of compensation.

I am also not at all sure that the experience of the noble Lord, Lord Somerleyton, who said that his company's staff are against it, is necessarily generally true. The British Waterways Board and inland waterways generally have quite naturally figured prominently in this debate, and the Government see this method as being by far the best way of preserving and making the best of this valuable asset, which is not only a reminder of our industrial history but also a major recreational asset. I would point out again here that although many of us would like to see the inland waterways used far more for freight, there are tremendous difficulties. I think one noble Lord compared our situation with Europe. He omitted to point out that the waterways there are very much wider and more easily navigable for heavy freight, so that while we want to keep as much freight as we can, and increase it where we can, it would be totally unrealistic to imagine that we can build up an enormous freight industry on the inland waterways in this country without tremendous capital investment, and changes which would have to be made at very great expense. We want a national navigation authority with canals linked organisationally, as they are physically, with the rest of the water industry. The noble Lord, Lord Sandford, expressed this as being the view of the Opposition.

My Lords, the very worrying and difficult question of equalisation again has been mentioned by several noble Lords. I must emphasise once more that this proposal is intended as a stop-gap to remove the worst discrepancy until the National Water Authority can devise its own permanent scheme. I agree it is of limited effect, but then, it has limited objectives. There is the effect on Wales to which my noble friend Lady White drew attention. The Government—and do not expect my noble friend Lady White to agree with this—cannot accept the suggestion that the Welsh Authority or, indeed, any other authority, should be free to make a profit on water transferred to other authorities. I believe we can think of better ways of making each authority endeavour to become self-sufficient in resources. But this suggestion would lead to wasteful duplication.

The issues raised in Paying for Water, which is the recently published document of the National Water Council, are very sensitive, and Ministers will wish to consider the document very carefully before commenting on its recommendations. The noble Earl, Lord Kintore, and the noble Lord, Lord Davies of Leek, both referred to different aspects of the Scottish situation. The Green Paper covers only England and Wales. because Scotland is separate for water purposes. The national boundary acts effectively as a watershed. The organisation of the water services in Scotland is also quite different as, indeed, are so many of the other Scottish services compared with England and Wales.

The noble Lord, Lord Davies of Leek, at the end of my first speech this afternoon, raised again the question of why there could not be more transfers between Scotland and England. The answer is that Scotland is hydrologically separate from England and Wales, apart from any theoretical view about it. As I said in answer to the noble Earl, Lord Kintore. to all intents and purposes the Border is the watershed. I know my noble friend feels that this probably could be overcome, but the expense involved would he absolutely enormous in terms of the mechanism and so on, as I think he will appreciate.

I was delighted to listen to the maiden speech of the noble Lord, Lord Wilson of High Wray, who made such a very good contribution to this complicated debate and who was able to bring all his experience and wide knowledge of this subject to the speech he made. There were a number of other points raised. The noble Lord, Lord de Ramsey, spoke on land drainage, the noble Lord, Lord Feversham, on cesspits, and a number of points were raised by my noble friend Lord Peddie. If I attempted to reply to all the points he raised, it would start up another debate. The noble Lady, Lady Kinloss, referred to freight on the waterways, which I have already dealt with to some extent. I do not want to raise all these points again, or to repeat what is in the Consultative Document. To do so would not be helpful and would only delay the House longer. As I have already said, all these points will be taken into account as part of the consultation process.

I would only say that my noble friend Lord Peddie, in what was a rather unfriendly contribution towards the Paper, raised the question of how it could be a Consultative Document and yet, at the same time, set down certain firm proposals that the Government wish to see implemented. I would point out to my noble friend. and I am sure that he is well aware of it, that there are two sorts of Consultation Document. There is, first, the Green Paper, which puts down proposals the Government would like to see implemented, and on which they have a firm view, so that they can ask for comments and consultation both on those and many other proposals in the Paper. Then there is the type of Paper we discussed a week ago, the Transport Policy Review, which was not a Green Paper, but had a tangerine-coloured cover. That Paper was much more wide open. It is quite wrong to attack the Government for putting down in a Green Paper, which is the usual procedure, a policy they want discussed and that it should not be completely open-ended.

Having said that, may I say that the whole debate was most stimulating. Considering the number of speakers, the debate has not been longer than was absolutely essential. I would end by saying how grateful I am to my noble friend Lady White for raising this matter. In opening, she said she would have liked the debate to have taken place rather later on, but nevertheless, by its taking place at this time, a great deal may have been gained because she has been able to hear the ccntributions of 18 people. all of whom have experience, special interest and special knowledge of the industry. I should have thought that this was a very valuable addition to the consultative process. I think that, on reflection, possibly my noble friend may feel that this was a very good time indeed to have a debate.

Lord PEDDIE

My Lords, before my noble friend sits down, is she able to give the House any information as to the forecasts relating to the implementation of the proposals with regard to equalisation, as I requested?

Baroness BIRK

My Lords, I cannot give any forecast because the consultative process goes on until the end of July. Then, Ministers will have to consider all the various views that have come in and all that is being said and written about the matter. From then on, we hope there will be some sort of timetable; but at present, there is nothing firm that I can say about it.

6.28 p.m.

Baroness WHITE

My Lords, I warmly thank all noble Lords who have taken part in this debate, which I agree with my noble friend Lady Birk is perhaps better timed than I had originally apprehended. I should like to express my particular gratitude to her for her valiant replies which I am sure are greatly appreciated. I am sure she will not misunderstand me when I say that possibly from her attitude on one or two of these matters, this ought to have been a White Paper with green edges. It appears to me that the Government have perhaps gone a little further in closing their mind than I would have hoped. I tell my noble friend quite frankly that I was disturbed at her attitude about the research centre, which is worrying a great many of us. I would hope that the Government might listen more widely than perhaps to some of the louder voices in their immediate vicinity on this matter. This is something that is causing us great concern. Planning is primarily water supply and sewerage in broad terms, but there are so many other aspects of research which could well be not exactly pushed out but disadvantaged unless we are very careful indeed of the way in which any change in this matter is carried out.

My Lords, I do not want to reply to the debate; it is not customary so to do on these occasions. I mentioned that matter because it is one about which I am particularly concerned. I call only repeat my very great appreciation to all Members of the House who have taken part in the debate. I hope that what my noble friend Lady Birk said is true, that Hansard will be carefully studied. I beg your Lordships' leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.