HL Deb 11 February 1985 vol 460 cc1-2
Baroness Burton of Coventry

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government when, and for what purpose, the decision was taken to classify the regional water authorities as nationalised industries.

Lord Skelmersdale

My Lords, since the water authorities were established in 1974 their financial framework has been akin to that of other nationalised industries. They have been treated as nationalised industries for purposes of public expenditure control and financial monitoring since March 1982. This accorded with the Government's statement at the time in another place of their plans to improve the nationalised industries' efficiency and performance.

More recently the Water Act 1983 reconstituted the water authorities by establishing on 1st October 1983 small executive style boards to run along nationalised industry lines.

Baroness Burton of Coventry

My Lords, has the Minister not omitted one important point from this change of status, and that is the question of asset ownership? I believe that he forgot to mention that. Does he recall that Mr. Roy Watts has said that the cash surplus demanded by Mr. Gow is unacceptable to his board in a monopoly supply of a vital commodity? Does the Minister not realise that most people in this country now regard the nationalised industries of gas, electricity and, more recently, water as tax collecting agencies for the Government?

Lord Skelmersdale

My Lords, so far as assets are concerned, in 1974 the water authorities took over the assets under the old local government arrangements at nil value. In reply to the last part of the supplementary question of the noble Baroness, the water authorities are being asked to produce a real rate of return on current cost accounting principles which compares with the electricity supply industry of 2.75 per cent. and with 4 per cent. for British Gas.

Lord Cledwyn of Penrhos

My Lords, is the noble Lord aware that water is an inflammatory subject in Wales? He may well have added to the flames. Will he clarify the position in relation to the Principality—that it has always been understood that the Welsh Water Authority has a special relationship with the Welsh Office; that is to say, with the noble Lord's right honourable friend? Notwithstanding what he has said about the principle of nationalisation in relation to water undertakings generally, will the noble Lord confirm that the relationship between the Secretary of State for Wales and the Welsh Water Board remains a special one?

Lord Skelmersdale

My Lords, water may be an inflammatory subject in Wales, but it is certainly not an inflammatory commodity. I can confirm the special relationship between the Welsh Water Authority and the Secretary of State, but the Government are united that it is one policy.

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