HC Deb 01 February 1989 vol 146 cc212-4W
Mr. Redmond

To ask the Secretary of State for the Environment what action he is taking in response to the Countryside Commission's report asking for a change in water privatisation plans to protect 300 sites it lists as being of conservation and recreational value and 15 sites warranting special protection because of their national importance which are owned by water authorities; and if he will make a statement.

Mr. Moynihan

I refer the hon. Member to the answer I gave the hon. Member for Bolton, South-East (Mr. Young) on 19 January.

Mr. Beith

To ask the Secretary of State for the Environment whether the measures he proposes to limit takeovers of water companies will apply to the Coquet water board; what information he has on the present ownership and control of this undertaking; and whether he will make a statement.

Mr. Moynihan

The Coquet water board will not be affected by the recently announced measures limiting takeovers of statutory water companies. It was wound up by the Newcastle and Gateshead Water (Coquet Water Board Dissolution) Order 1983, and its liabilities were taken over by the Newcastle and Gateshead water company. It now has no separate existence.

Mr. Goodlad

To ask the Secretary of State for the Environment if he will take steps to assess whether the acquisition of a stake in the Folkestone water company in partnership with AIPF by the Southern water authority will lead to greater competition.

Mr. Moynihan

The special provisions for water mergers announced by my right hon. Friend the Secretary of State on 11 January do not apply to mergers involving water companies with assets of less than £30 million. The continued independence of such companies is not essential to comparative competition, which those provisions are designed to safeguard. The acquisition of shares in smaller water companies continues to be subject to fair trading legislation, the administration of which is the responsibility of my right hon. and noble Friend the Secretary of State for Trade and Industry.

Mr. Nicholas Baker

To ask the Secretary of State for the Environment whether he will indicate the increases in water charges proposed by the water authorities for 1989–90; and if he will make a statement.

Mr. Howard

The water authorities are facing demands from the public and from Government to meet increasingly stringent quality standards for drinking water, for our rivers and for coastal waters. These improvements cost money.

The Government have therefore agreed to a 20 per cent. increase in capital expenditure in 1989–90 which will enable the authorities to continue to move towards these higher standards. I announced this to the House on 2 November, when I also expressed the expectation that increases in charges for next year should, on average, be kept to single figures.

Several of the water authorities' chairmen would have preferred even more ambitious programmes of investment next year. However, in considering the need for increases in water charges I have given full weight to the interests of the consumer and the need to avoid sharp increases in any one year. I have also had to take into account the national pressures on the construction industry and the need to avoid unreasonable demands which would lead to higher construction prices.

The discussions I have held with the water authority chairmen enable me to confirm that their proposals on charges for 1989–90 will result in an average increase of under 10 per cent., with individual authorities' average increases ranging from 7 to 13 per cent.

I am confident that the figures we have agreed will enable the water authorities to make good progress towards our targets for improved environmental standards in the coming year. They represent an appropriate balance between charges and borrowing next year, taking account of the authorities' long-term financial requirements. Once the industry is privatised, it will no longer have to compete for public funds; it will be free to raise finance on the markets.

Mr. Goodlad

To ask the Secretary of State for the Environment if the Southern water authority has given him an undertaking that it will not use minority stakes in statutory water companies' to block either the removal of limits on dividends or the companies' conversion to plc status; and if he will make a statement.

Mr. Moynihan

[holding answer 30 January 1989]: No such undertaking has been given.