Water Charges (Hansard, 25 May 1989)

The Minister of State, Department of the Environment (The Earl of Caithness)
My Lords, our proposals for limiting the level of water charges in future are set out in the Water Bill and the model instrument of appointment of the water and sewerage undertakers, copies of which are available in the Library.

§ Lord Molloy
My Lords, I am grateful to the noble Earl for that reply. However, is he aware that, despite what he has said, there are somewhat disturbing reports that some water authorities, in preparation for privatisation, are lowering the standards of pollution elimination and of water purification? Is that not a serious situation that the Minister, via his right honourable friend, should at least examine?

The Earl of Caithness
My Lords, all those who took part in the Committee stage missed the contribution of the noble Lord when we discussed the matter at some considerable length earlier this week. With respect, I think that the noble Lord has confused water authorities and statutory water companies. So far as concerns the future of prices, they will have to rise in order to meet the higher standards. That is quite different from what happened under the Labour Government when prices rose, investment was cut and pollution increased.

§ Lord Molloy
My Lords, in that case can the Minister say why a figure has been given in those reports which clearly shows that any Briton living in a new house in the next year will find that the water rates will be increased by £800 a year?

The Earl of Caithness
My Lords, of course it is not right to put a figure on it. I said that water prices and sewerage costs will increase to meet the higher environmental charges. That is why we have brought the Bill before the House—in order to make sure that we can meet the higher standards.

§ Lord Nugent of Guildford
My Lords, is my noble friend aware that the figure of £800 quoted by the noble Lord, Lord Molloy, seems to indicate that he has picked up the figure that was discussed during the debate on the cost of connection, which in future will be thrown on to the developer of a new building, not every year but just once at the time of the original construction?

The Earl of Caithness
My Lords, my noble friend is absolutely right. That is why all noble Lords who took part in the debates in Committee regret not having the presence of the noble Lord, Lord Molloy.

§ Lord Graham of Edmonton
My Lords, the Minister will appreciate that I attended all the debates and stayed until the small hours. I still bear the scars. Perhaps I may ask him to deal with the Question in this way, which is surely directed towards the possibility of varying the tariffs in certain circumstances. Perhaps I may remind him that in our debates earlier this week he acknowledged that within the documentation and the model rules there will be scope for variation in tariffs. Can he say something about the freedom and flexibility of the new plcs in the light of their costs and circumstances? What scope do they have for deciding separately and disparately according to their circumstances that they will vary the cost so that supplies of water laid on for the domestic user will be cheaper rather than dearer than those for other users?

The Earl of Caithness
My Lords, I do not put the same interpretation on the Question of the noble Lord, Lord Molloy, as does the noble Lord, Lord Graham. However, it is good to see the noble Lord is still in such fine health. The increases in the prices will come through a basket of water and sewerage undertakers' charges and will be limited to an amount related to the retail prices index—the so-called RPI plus K formula. Charges to individual classes of customers will be prohibited from showing undue discrimination.

§ Lord Nugent of Guildford
My Lords, is my noble friend aware that the point that there should be no discrimination between different water users was very clearly made in the 1973 Act? Is he further aware that it must be absolutely right to stick to that decision? I hope that he will.

The Earl of Caithness
My Lords, we intend to stick to it, and, with the support of my noble friend, we shall do so.

§ Lord Molloy
My Lords, the great knowledge and ability of the noble Lord, Lord Nugent, as well as his vast experience in these matters are acknowledged by everyone. However, does the Minister agree that there are a few other specialists and scientists who also know a good deal about this matter? At one time they were providing the noble Lord, Lord Nugent, with some of the information he now possesses. Will the Minister acknowledge their opinion that that £800 for the initial changes takes into account constant repair and maintenance, which is why that price may continue for some years?

The Earl of Caithness
My Lords, with respect, I think that that is not the situation. My noble friend put it exactly right.

§ Lord Sefton of Garston
My Lords, with reference to the numerous people who obtain their drinking water and other water supplies from the Highlands of the United Kingdom and have done so for hundreds of years by tapping a variety of wells and using pumps at no cost, can the Minister give the House an assurance that the situation in regard to those supplies of water, which hitherto have been monitored by the local health authority, will remain under the Bill as it is now?

The Earl of Caithness
No, my Lords, I cannot give the noble Lord that assurance because of the very important fact that those sources may contain elements that do not conform to the European Community standard. If they do not conform to that standard, the water supply will have to be improved.

§ Lord Sefton of Garston
My Lords, can the Minister tell the House what steps will be taken to monitor those supplies?

The Earl of Caithness
My Lords, there will be an increasing number of steps taken to monitor water supplies. We are setting up a new body, the National Rivers Authority, which has an increasingly important role to play and will be able to do much of the work to create the improvements that are badly needed.