HL Deb 09 March 1989 vol 504 cc1603-5

3.25 p.m.

Lord Dean of Beswick asked Her Majesty's Government

Whether there has been any change in their policy for privatisation of water following the Prime Minister's statement at the Conservative Party local government conference.

The Minister of State, Department of the Environment (The Earl of Caithness)

My Lords, No.

Lord Dean of Beswick

My Lords, on this occasion I had expected a very brief Answer. Bearing in mind the statement that the Prime Minister made at that conference, is the Minister aware that it is not up to the Opposition parties and the press to make the case for a government measure? Is it not also a fact that the measure is so bad in terms of what it will do to the service for the public in general that public opinion polls are running heavily against it? Have not the Ministers involved presented a poor case because it is a poor case to start with? Will the Minister ask the Prime Minister to stop acting like a petulant matriarch on this occasion and abandon the whole business in the interests of everyone concerned?

The Earl of Caithness

My Lords, the answer to the last question is no.

Lord Stoddart of Swindon

My Lords, if the noble Earl will not listen to the Oppositior. on this particular issue and if he does not agree that it is an idiotic, ill thought out measure, will he listen to the growing chorus of dissent and opposition from Conservative Members of Parliament as exemplified by Mr. Nicholas W Winterton on Jimmy Young's programme yesterday? Will the Government take note of those voices? If they do not, I am afraid that they will be soundly beaten.

The Earl of Caithness

My Lords, the noble Lord is wrong to accuse the Government of not listening. I can tell the House the advantages of privatisation. The separation of environmental and economic regulation from the provision of water supplies and sewage treatment work is vital if conflicts of interest are to be avoided. Only privatisation can separate ownership of the industry from its regulation. Only privatisation can unlock the door to access to private sector funds, ending the present position where spending on water industry infrastructure competes annually with spending on hospitals and schools for a share of the public purse. Nothing could be clearer than the effect of the IMF paymaster on water authorities' investment which was cut by one-third between 1974 and 1979.

Lord McIntosh of Haringey

My Lords, will the Minister accept the gratitude of those on this side of the House who appreciate his setting out in advance the three weakest possible arguments for water privatisation that we have yet heard?

The Earl of Caithness

My Lords, the noble Lord is more than his usual ebullient self. They were merely part of the argument.

Lord Grimond

My Lords, am I right in thinking that the Government made representations to try to reduce the horrifying projected increases in water charges and that they received a dusty answer? If that is the case, will they make further representations and what hopes have they of containing the projected increases in those charges?

The Earl of Caithness

My Lords, the increases to which the noble Lord refers are of course the increases of those companies that are already in private hands which supply 25 per cent. of the water to England and Wales. Some of us can remember large increases. In those halcyon days of 1975–76 and 1976–77 there was a 26.3 per cent increase following a 42.8 per cent. increase in the same year that investment in water was cut.

Lord Boyd-Carpenter

My Lords, would it not be better to defer debate on the Water Bill until it comes to us?

The Earl of Caithness

My Lords, my noble friend makes a sensible suggestion. I am happy to debate the Bill at any time.

Lord Cledwyn of Penrhos

My Lords, is it not the case that the Prime Minister has herself said that she is not satisfied with the way in which this matter has been presented to the public? Can the noble Earl tell us how the presentation is to be changed so as to sastisfy the British public, who at present feel a profound disquiet about the implications of this legislation? Can he further say why no date for flotation has so far been given by the Government either in the course of the legislation or by his department? Is the reason for that that at the end of the day the legislation will be dropped by the Government? That is the hope of the great majority of the people of this country.

The Earl of Caithness

My Lords, on the noble Lord's first question, I do not have control of the press or of what the Opposition parties say. No date has as yet been fixed for flotation. That is not surprising. One will be fixed in due course.

Lord Jenkins of Hillhead

My Lords, is it reasonable or proper that when a piece of government legislation proves profoundly unpopular the Government should greatly step up the expenditure of public money on propaganda in its favour?

The Earl of Caithness

My Lords, what we are doing is stepping up the amount of money spent on the infrastructure of water, to improve the quality.

Lord Molloy

My Lords, can the Minister say what will be the degree of foreign ownership when privatisation takes place? Which are the foreign countries and foreign organisations already involved? Will there be any defence of the land, much of which is now publicly owned in British interests, which would pass to foreign ownership?

The Earl of Caithness

My Lords, those three questions are very different from the Question on the Order Paper. I hope the noble Lord is not suggesting that he is against foreign investment.