§ 2.52 p.m.
The Minister of State, Department of the Environment (The Earl of Caithness)My Lords, I beg to move that this Bill be now read a second time. The broad purposes of the Bill are to restructure the provision and regulation of water and sewerage services in England and Wales, to enable the privatisation of those services, and to update Scottish water and pollution law.
This is a major Bill by any standards and we believe it is a good Bill. It will be good for us as consumers and as taxpayers; it will be good for the environment; it will create a more efficient and more effective water industry. It is the way to achieve the standards we all want to see.
547 Water is essential to life. People want to be sure that water and sewerage services will be there when needed. They want drinking water that is clean and safe. They want sewerage services which pose no threat to health; ideally, out of sight and out of mind. They want to know that river quality is being improved, and that beaches are safe to use.
I doubt whether any of us in this House would dissent from these desires; indeed, I suspect that there would be little between any of us on the general objectives we would set for the water industry. For that reason, many of the measures in this Bill deserve general support, even though there may be details which merit close discussion.
More fundamentally, there are those who accept the case for changes in the way the industry is regulated, but not the case for privatisation. However, it is crucial to the approach of this Bill not only that the roles of regulation and production should be given to separate bodies but that the responsibility of the state should be clearly confined to regulation, while the business of production passes to the private sector. Only then can we end the temptation to fudge quality objectives because of financial constraints.
People are quite right to demand proof that this Bill is in their own best interests. None of us wants to see change, especially radical change to one of our most essential industries, simply for the sake of it. As I have said, people are rightly concerned about reports of the need for purer drinking water quality, improved sewage treatment, fresher rivers and cleaner beaches. People are also concerned about increased prices as a result of the major investments required to meet those improved standards. Those concerns are not new but they have nothing to do with privatisation.
However, privatisation has everything to do with them. The measures in this Bill will lead to a better organised, more efficient and better motivated industry—an industry properly equipped to tackle problems head on. This Bill provides the framework for a thriving, efficient, private sector water industry within a strong framework of public regulation.
It is a daunting task to explain the main provisions of a Bill of 187 clauses and 26 schedules in only a few minutes. Part I establishes the framework of new bodies that will take on the water authorities' current functions. A new National Rivers Authority will be dedicated to maintaining and improving the quality of our rivers and protecting land from flooding. This environmental watchdog will be complemented by a new Director General of Water Services—a consumer watchdog—whose tasks will include the fixing of the maximum charges for water services, while ensuring that efficient water companies can finance the standards set by Government. There will be regional rivers advisory committees and new customer service committees, independent of the water and sewerage businesses.
Part I also imposes general duties on the Secretary of State and director general to ensure the proper provision of water and sewerage functions in the future. The duties also include the very important 548 requirements to further conservation and provide recreation, to which I shall return later.
Part II of the Bill puts in place all the mechanisms needed to ensure the proper provision of water and sewerage services by the new companies. Chapter I contains the procedures for appointing companies, for enforcing the conditions of appointment, for the appointment of a special administrator in cases of serious default or insolvency and to control mergers of water companies in order to safeguard proper comparative competition.
Chapters II and III impose water supply and sewerage duties, requiring the provision of infrastructure and supplies of wholesome water to specified standards. Chapter III also provides for control over trade effluent discharges; while Chapter IV determines charging methods for all these services. Chapter V contains the financial provisions necessary to establish the new companies, and Chapter VI amends statutory water company powers so that they can be appointed water undertakers and also convert to plc status if they so choose.
Part III is the other substantial part of this Bill. It establishes how rivers and other waters are to be managed and protected, mainly by the National Rivers Authority. Under Chapter I the Secretary of State will set new objectives for river quality, and the NRA will control discharges and take other steps to attain those objectives. Under Chapter II it will also license abstractions to ensure the proper management of water resources. The remaining chapters in this part deal with land drainage, flood defence, fisheries, navigation and other matters.
Compulsory purchase and works powers, together with the necessary safeguards, are contained in Part IV. These are necessary to ensure that all the duties in this Bill can be properly carried out. Part V introduces new water and pollution provisions for Scotland, while Part VI deals with the usual miscellaneous matters.
I think your Lordships may find it helpful if I summarise the package of proposals by referring to three main themes running through this Bill: protection of the consumer, removing conflicts of interest, and providing financial freedom for 10 major businesses.
The first theme is the benefit to customers, through the establishment of higher drinking water and environmental standards and through other service standards and controls over prices. The new companies will have to meet clear, strict drinking water quality standards, against a background of a new criminal offence of supplying unfit water and a new enforcement regime backed by a new drinking water inspectorate with full and unprecedented powers to go in and carry out technical audits of records, actions and procedures.
European drinking water standards will be incorporated in regulations under the Bill—in other words, incorporated directly into British law for the first time. The public will have access to information on drinking water quality that will make it absolutely clear whether water supplies comply with the standards set out in the regulations; and, if not, what the company is doing to remedy the problem.
549 Other standards of service are set out in the Bill and will be in regulations; the companies will have to meet standards, or, in some cases, pay a penalty. The enforcement powers in Clause 20 will enable the Secretary of State and director general to specify what action should be taken to remedy breaches of drinking water and other standards. These will be clear and open processes, and subject to the scrutiny of the courts.
A key part of our new regulatory system will be controls on charges. These controls will be set in the first instance by the Secretary of State, and thereafter by the director general, the new consumer watchdog. Clause 7 of the Bill governs this process. Under it the charge limits will be set at levels which will ensure that water and sewerage functions are properly carried out and that companies can earn sufficient returns to raise the finance that they need. Both of these considerations are essential from the consumers' point of view. It is in nobody's interest in the long term if companies are unable to finance their activities. But Clause 7 also provides specifically for consumers' interests to be protected and for efficiency, economy and competition to be encouraged. That will restrict charge levels to what is necessary.
We are not saying that this will prevent charges from rising. Charges will have to increase to pay for higher standards. No one disputes that. What the Bill will ensure is that consumers pay no more than is necessary to allow companies to provide water and sewerage services efficiently to the standards we are setting.
The second main theme is the removal of current conflicts of interest. I have said that it is important for us to prove the case for change. I can illustrate that case by reference to river pollution. Surely none of us can accept the continuation of the current process whereby the same authority that sets the targets for river quality can itself later adjust those targets downwards if it fails to control pollution. That is almost as if students were asked to set their own exams and mark their own papers. Nor surely can any of us conceive of employing a poacher as a part-time gamekeeper. Yet we ask the water authorities to police river pollution when they themselves are a source of such pollution. It is simply not reasonable to expect the best performance from a system such as this.
The establishment of a new National Rivers Authority will be a major step forward for the environment and will remove the potential for such conflicts of interest. But the NRA can only be truly effective if it is in separate ownership to those it controls, including suppliers of water and sewerage services. The Government will set clear standards and timetables to maintain and improve river quality. The NRA will then control river pollution and ensure that the national standards are achieved. Only through privatisation can firm and consistent controls be applied effectively to the water industry and other businesses alike, by persuasion or prosecution. For the first time a new charging system will mean that polluters will have to pay the cost of pollution control. The NRA will have the teeth, the cash and the staff to do this effectively. Dr. John 550 Bowman has today been appointed chief executive by my noble friend Lord Crickhowell who, as your Lordships know, is chairman of the National Rivers Authority advisory committee and to whose speech we are looking forward.
The benefits to customers and the removal of potential conflicts of interest are inextricably bound to the third main theme running through this Bill. That is the creation of economic and managerial freedom for the industry within the strong public control I have mentioned. This freedom can only be achieved if we remove the water industry from the public sector and the nationalised industry financial controls which are necessary so long as it remains there.
All experience shows that businesses are more efficient and successful in the private sector than in the public sector. The water industry is no different. The daily measure of performance provided by the share price will itself provide a discipline and spur to management and to those of the workforce who have invested in the company, releasing the energies and entrepreneurial talents of the industry.
There is no doubt that cleaner rivers, cleaner beaches, and purer drinking water cost money. But much of the cost of these improvements falls on the public purse. We have a major spending programme under way to reduce the backlog of investment including that dating from the late 1970s, when the last Labour Government inflicted long-term damage by cutting capital investment programmes. Those reductions were criticised by an all-party Select Committee in the other place. The good news is that we have been able to ensure that capital investment by the water industries has grown in each of the last eight years. Even so, we are not satisfied. Even though we are increasing investment by 20 per cent cent. this year alone there is still a lot to be done. That is why we have set in hand a major programme of capital investment aimed at bringing water standards up to scratch as soon as possible. The cost of maintaining improvements and high quality is substantial.
Freeing the new private water companies from government financial restrictions will mean an end to that competition. The industry will be free to pursue the most effective investment strategies for cutting costs and improving standards of service. Coherent long-term investment strategies will no longer be subject to interruption by changing political priorities. Those who argue that the industry could be released from public sector controls while remaining in the public sector have to show why this industry alone could be exempted when other priorities are just as pressing. I have to remind your Lordships that this was not a case that the IMF accepted—if it was ever put to it—in 1976. The consequence of that was a 50 per cent. real terms cut in sewerage investment and substantial cuts in other investment over a very short time. The detrimental effects on the quality of water and on the environment were inevitable.
Before concluding, I want to turn to one or two specific areas where I know that this House will have a particular interest. First, I want to remind the House that a quarter of the water supply industry is 551 already in the private sector. The principle of private sector operation within public regulation is already conceded. But some who are in favour of privatisation would prefer, I gather, to follow the statutory water company model to the letter. No doubt we can return to that later, but for now, I want to make sure that they are aware of the unambiguous analysis of the Monopolies and Mergers Commission in 1986. The commission found that for these unnatural companies, where dividends are limited, the normal private sector incentives for managers to keep plugging away at cost reduction simply do not exist. They concluded that the existing private companies were not in their view a useful model to follow. This Bill protects the customer against abuse of the natural monopoly position by strong, fair regulation, while providing the financial freedom to encourage efficiency. That is the best approach.
Then there is the question of the management of land by the new water and sewerage plcs. Over a third of water authority land is in national parks and areas of outstanding natural beauty. Its conservation is important for the nation. The value of this land for recreation has also been recognised since Victorian times.
That is why this Bill provides for the current duties that apply to water authorities to be continued, clarified, detailed in a code of practice and given teeth. In addition, the new National Rivers Authority will act to promote conservation and recreation. The new companies and the NRA will be bound to further conservation and have regard to the preservation of public access to much of their land. They will also have to make their land and waters available for recreation in the best manner, although in this there will often be a balance to be drawn between conservation and recreation.
Most important, the conservation, access and recreation duties are enforceable by the Secretary of State. In considering enforcement action the Secretary of State will take account of the extent to which the new companies follow the best practice set out in a code. We have already published a draft so that all can see what will be required of the industry in the future.
In the other place, the Bill has been amended to make clear that the access duty will apply to concessionary paths and the right to roam, where this has been granted by the water authorities, as well as to public rights of way. In addition, rights of public access and amenity under local enactments, covering, for example, the Elan Valley and parts of the Lake and Peak Districts, could not be altered by the Secretary of State.
Together these measures will provide a secure framework for the protection, enhancement and fuller enjoyment of the water environment, not just of our rivers, lakes and reservoirs, but also of the water industry land in the national parks, areas of outstanding natural beauty and elsewhere.
These and other issues will absorb our attention over the coming weeks. We look forward to listening to the arguments that are put forward. But the main thrust of the Bill is clear. We are all consumers. We 552 will all benefit from improved standards. Whether we are looking for better water to drink, better water to fish in, better water to sail in, or better water to bathe in, privatisation under this Bill is crucial to the achievement of those goals. On detailed analysis only privatisation can provide a clear and full separation of the management of industry from regulation of that industry. Only privatisation can provide true accountability in place of the potential for conflicts of interest which block the road to higher standards. Only privatisation can provide the industry with the freedom of financial and operational management which is needed if improved standards are to be achieved quickly and efficiently.
The Bill represents a great breakthrough in the long history of both private and public water and sewerage provision in this country. We are convinced that it is the right way forward. I commend the Bill to the House. I beg to move.
§ Moved, That the Bill be now read a second time.—(The Earl of Caithness.)
§ 3.10 p.m.
§ Lord McIntosh of HaringeyMy Lords, the only thing that gives me pleasure in rising to the Dispatch Box to speak on the Bill is the prospect of crossing swords once again with the noble Earl, Lord Caithness. We have had this experience on a number of occasions in the past. Although our disputes have never been less fierce, they have always been courteous. I can see that that will happen again, at least on his side.
Much of what I have to say on the Bill was said much more succinctly and better by Joseph Chamberlain in 1874. He said:
All private regulated monopolies, sustained by the state, in the interests of the inhabitants generally, should be controlled by the representatives of the people, and not left in the hands of private speculators".He went on to say:The waterworks should never be a source of profit, as all profit should go to the reduction of the price of water".I said "much of what I have to say" because I did not want the House to delude itself into thinking that I would sit down at this point. I propose to show that the Bill is wrong for the water industry itself, wrong for the taxpayer, wrong for those whom the Government think might be persuaded to invest in the water industry on flotation, wrong for the consumer and wrong for the environment. In other words, I disagree with every single one of the points put forward by the noble Earl.I should like to deal first with the water industry. The noble Earl spoke about the opportunities of economic and managerial freedom. Let us be quite clear about this. The privatisation of the water industry proposed in the Bill will not bring about a free market or the benefits of a free market. Under the proposals in the Bill water undertaking plcs will not be like public limited companies in the private sector. Plcs in the private sector have the right to control their own assets, to control their own investment, to dispose of their assets if necessary, to set their own prices, to refuse to supply customers if they choose so to do, to divest themselves of part of 553 their business if necessary, and in the end, if they have to, to go bankrupt.
Not one of those rights applies under the regulatory regime which is to be imposed under the Bill. The Financial Times described it as a "very harsh" regulatory regime. If the conditions of privatised water plcs are not the same as those that apply in the true private sector, what argument can there be that the benefits which accrue, according to government theory, from the free market, can also apply to the water plcs?
The crux of this matter is in the arguments about competition. The Water Authorities Association, which has a strong vested interest in privatisation—or at least its top managers have such an interest—has argued that there will be some substitute for competition in this natural monopoly. It says that there will be competition between one water authority and another. The Government have shot the ground from under that argument very thoroughly by making it clear in the past few months that the price setting mechanism—the RPI plus K mechanism—will be applied separately to each water authority. They have done so because they recognise that the conditions of costs and the nature of supplies that apply in separate water authorities will be different from one another. If the Government cannot apply a common standard to the profitability of water authorities, how on earth can the investors in the business, the public at large or the consumer have any idea of whether the water companies are being efficiently run? The argument for comparative composition does not stand up for a moment.
The same is true of the argument on share price. If the Government cannot set common standards for the efficiency of the industry, how can those proposing to buy shares make the distinction? This applies also to the third argument of the Water Authorities Association. It says that this will be regulated by capital markets. The other arguments it uses are so trivial that it is hardly worth referring to them. It says that there will be real competition in greenfield sites—in completely new developments, new towns and so on. If that amounts to more than 1 per cent. of the supply in this country I shall be very surprised. It also says that there could be real competition in supplies to large industrial consumers. Again, that argument makes sense only if those industrial consumers happen to be right on the boundary between one site and another. The argument, therefore, that the water industry will benefit from privatisation and that management in the water industry will also benefit is extremely thin.
The Government argue that the taxpayer will benefit. Let us look at the figures, even if they are only in outline. The assets of the water industry have been estimated at approximately£27 billion. Flotation is not referred to directly in the Bill but it has been a proper matter of public discussion over many months now. The informed estimates are that the proceeds of flotation might result in a gross return to the taxpayer of perhaps£5 billion to £7 billion. Therefore we are already talking about a discount of 80 per cent. in the value of the water industry against what the taxpayer may expect to receive.
554 Unfortunately it does not stop there. The water industry of its nature is intensely dependent on long-term capital. The debt of the regional water authorities has been calculated at approximately £5.2 billion. It has been made clear that, certainly for some and possibly for all of the water authorities, in order to make them attractive on the market, the long-term debts will have to be written off. It could easily happen that virtually all of the proceeds of flotation will be squandered in writing off debts to the Government.
One has also to remember that the taxpayer receives not the proceeds but the proceeds less the cost of flotation —in other words, the cost of all of the advisers and all those concerned in the City with the flotation. We are already paying the cost. We already see a totally unnecessary and futile attempt to persuade us about the need for water. Our newspapers and our advertisement hoardings are full of it. It will not be very long before our television screens are full of this nonsense. A totally unnecessary advertising campaign is being put out by the Water Authorities Association at the expense of the water consumer. It is doing so only because it anticipates privatisation. When we come to the Government's advertising after the Bill becomes law, as we fear it will in some form or another, we shall see an even greater waste of taxpayers' money on this privatisation procedure.
The argument has been well rehearsed by the noble Earl as to whether some of the advantages he sees in privatisation could exist without privatisation. One example is the National Rivers Authority. We welcome the National Rivers Authority. It is a significant advance on the 1986 privatisation proposals. However, from the point of view of flotation, what does the National Rivers Authority do? It takes away from the regional water authorities virtually all of their non-profit making, environmentally necessary functions which would, if they were left with the water authorities, effectively ruin the flotation. The White Paper itself says that land drainage is not a commercial proposition. What is happening? The parts that can be floated off are being floated off at, as will become clear, a rather poor price. The parts that are environmentally necessary will remain the responsibility of the taxpayer. The taxpayer and the consumer will suffer. None of that is new. Indeed, in the early Stuart days, the days of mercantilism, successive monarchs thought that they could benefit their own bankrupt treasury by awarding monopolies. Godfrey Davies, the author of The Early Stuarts, gives the figures. He says:
It is calculated that in order that the Crown might receive £80,000 a year gross from the monopolies in starch, coal, salt and soap, the consumer had to pay between £200,000 and £300,000 a year more for these articles".If one adds a few noughts on to the end of that figure for inflation, that is the position in which we shall find ourselves in 1989–90.I turn now to the supposed investor. I have been looking at some of the opinions expressed in the City by stockbrokers who have to advise their clients as to whether this will be a good investment. I think that the most clear exposition of those opinions is that from Mr. Nigel Hawkins from Seymour, Pierce 555 Butterfield, who was himself a Conservative candidate at the last General Election. He describes water as:
Not an exciting investment".That must be so.The basic demand for water from the water industry grows by, at most, 1 per cent. per year. We have an industry which is extremely capital intensive. It is quite different, for example, from the National Freight Corporation, or one or two of the claimed successes of the privatisation procedure. We have an industry which, as the noble Earl made clear, is heavily constrained by EC directives. Indeed, we shall have to look more carefully at how closely the Government are going to pay attention to such directives.
We have a regulatory framework, which I have already described as very harsh, which will effectively stop those natural monopolies from exercising their natural monopolistic rights to charge monopoly rents. Above all, we have an industry —as the noble Earl made clear in his most candid speech—which has been starved of capital for many years. Even the minimum amount of investment which is necessary for replacement of the system has not been reached in virtually any year since 1973. I make no party political point about that issue; I am simply saying that past investment, from the point of view of the investor, has been too low. Thus we have an industry which needs more investment but which is constrained by regulation and by European Community directives. It will therefore be extremely difficult to sell the industry to the investor at the time of flotation.
I turn now to the crux of the debates which we shall have on the Bill as it proceeds on its various stages through your Lordships' House. The truth of the matter is that however strong the arguments may be for consumer interest to be protected by amendment, or for environmental interests to be protected by amendment, the Government will be forced to oppose them. They will have to do so not on consumer or environmental arguments, but because they cannot risk an already delicate flotation falling short. That is their difficulty. That is why the business managers on the Government side, in this House and in another place, will have to keep up a high attendance of those who do not listen to the arguments. I say that because those who do listen to the arguments, those who are concerned about consumer interests, those who are concerned about environmental issues and those who know about the water industry, will not be taken in by the Government's arguments for one moment. That is the difficulty they will face, and I can assure the House that that is the difficulty which we shall exploit.
The fact of the matter is that the water industry is, even in strict capitalist terms, not a suitable candidate for privatisation. Let us leave the consumer and environmental arguments to one side for a moment. In order for an industry to compete effectively for capital in private markets, it should have an earnings per share increasing at, say, 10 per 556 cent. to 15 per cent. per year. How will that figure be derived from the water industry, the core business of which increases by, at the most, 1 per cent. a year? It will only come from higher prices, which will be constrained by the Director General of Water Services; from less investment, which will be constrained by the European Community; from lower quality, which will be constrained by the Government and by the European Community, or from disposal profits on disposal of assets. That is the crux of the matter. That in the end is the intention behind a large part of this privatisation procedure. That is where the consumer, the environmental interests, as well as the taxpayer, will be short-changed by the privatisation procedures which we see before us at present.
The noble Earl announced—and I listened to him with great interest—changes in the Bill that he proposes to put forward which will allow further access to land in our national parks and elsewhere. We wait to see what those amendments are before we comment upon them in detail, but, in principle, that announcement is welcome. However, that is only a small part of the risk to the environment from this Bill.
The land assets of the water industry amount to nearly half a million acres of which 97,000 acres are in Wales alone. Those land assets are not, in most cases, essential to the industry. They have been built up at the expense—I hasten to say—of local ratepayers, rather than taxpayers, in our great cities over a period of more than 100 years. They were expropriated from those ratepayers in 1973 on the argument that the local authorities would still maintain a majority of the membership of the new regional water authorities. That arrangement lasted for 10 years until the next Conservative Government were elected. But in the 1983 Act that provision was taken away.
Such assets are worth incalculable amounts of money. In our countryside especially it is almost impossible to say how much they are worth in money terms. But it is clear to all of us, and especially clear to Members of this House, that such land assets in the Lake District, the Peak District, in Wales and elsewhere, are of incalculable value because they are of value to our quality of life. However, that is only one part of the matter. The other part is that the assets, particularly those of the Thames Water Authority which exist in our urban areas and many of which are now surplus to operational requirements, are worth very calculable amounts of money.
If we look at the assets of the Thames Water Authority and if we look at the Perry Oaks sludge treatment depot—which, no doubt, will be Terminal 5 at Heathrow in due course—or, if we look at 93 acres in Stoke Newington or at the many unnecessary reservoirs (unnecessary because the water ring main which now exists around London, in the South West near Staines) we will see that those assets are worth billions of pounds.
Moreover, we run a serious risk that they will be thrown away in a flotation in exactly the same way—although much worse—as assets from the Royal Ordnance factories were when they were sold far too cheaply to British Aerospace. I thought that 557 after the criticism which was made about that sell-off the Government would not have the nerve to come forward again with similar proposals. Yet this Bill does not contain anything like adequate assurances that the assets which belong to the people—whether they are ratepayers or taxpayers—will not simply be used as a benefit for private profit.
If we look at water quality, the problem there is very serious indeed. There are a million households in this country with water supplies which contain nitrates at a level which is above that permitted by the European Community. For example, the Anglian Water Authority will have to spend from between £60 million and £70 million over 10 years in order to deal with that problem. We have taken no effective steps to deal with European Community rules on pesticides. Ten per cent. of Welsh households are at risk from excessive lead in their water. A vast amount of investment is required and it is required as a result of neglect over a significant number of years. Moreover, the privatisation procedure which we have before us does not give us any confidence that that neglect will be dealt with.
I could extend the arguments about the environment at some length. However, many of my noble friends are much better informed than I on such matters. I have no doubt that they will be talking about the polluter pays principle; they will be talking about codes of practice for leisure access to water authority land and they will raise many other points with which I simply do not have time to deal.
I make it clear, as I did before, that we welcome the National Rivers Authority. We wish it well. We wish it adequate resources, staffing and powers. We do not however welcome many of the powers of the Director General of Water Services.
I now refer to our responsibilities towards consumers. The problem we have with the consumer regulation proposed in the Bill is that the Director General of Water Services has direct control for customer service committees which are set up under the Bill. We believe, just as we believe that the codes of practice should be statutory, that the customer service committees should be independent of the Director General of Water Services who has responsibilities which are different from looking after the consumer.
The Bill is defective in so many ways that it would be impossible for me to pinpoint even the most important. I shall pick one example only which shows the way in which the treatment of consumers and the environment is inadequate in the Bill and will need to be amended as the Bill proceeds through your Lordships' House. That example relates to the duties of the Secretary of State and the Director General of Water Services under Clauses 7 and 8. Despite strong protests over the past months as the Bill was going through another place, the Bill still says that the first duty of the Director General of Water Services and of the water company plcs is to achieve a reasonable return on assets. It is only subject to that duty that there is any protection for the consumer or the environment. While that conflict exists, and while the return on assets takes priority over the interests of the consumer and the environment, we shall not be reassured that the 558 consumer and the environment are beneficiaries of the privatisation procedures.
On all those matters, we find a conflict in the privatisation proposals, the terms of this lengthy and elaborate Bill and the interests of the consumer, the environment and the economy. The Daily Telegraph—no enemy of the Government—summed the whole matter up a few weeks ago by describing it as a "wholly misguided venture". It said:
It is still not too late to think again".I urge the Government to listen carefully to the arguments which will be put forward on all those points; to listen with an open mind and not to reject them out of hand; and to seek to improve the Bill as it passes through your Lordships' House.I warn the Government that whatever they may think about the Bill, the privatisation of water is deeply offensive to the people of this country. That has been proved over and over again. I repeat the words of my right honourable friend the Leader of the Opposition who, echoing the words of Joseph Chamberlain, said only last week:
Water is our country's largest natural monopoly. We in the Labour Party believe that it must be publicly controlled and fully accountable. We will end the private monopoly and bring the water industry back into public control".