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Mr. Spearing : The hon. Gentleman says that it is a good idea. At least the possibility exists. The potential for damage to public health services--that is what our sewerage system is--is enormous, and beyond what the British public have understood so far.

This Bill is not about providing fresh, pure water. It is about providing worldwide capitalist interests with yet another card that they can play on the international Monopoly board. They will be playing not only for waterworks, but for our sewers and drains which were built by our Victorian forefathers as Victorian virtues. Even they believed in public ownership, and so should we.

7.39 pm

Mr. Alastair Goodlad (Eddisbury) : I welcome the Bill as one of the most important advances in environmental legislation that has yet happened. The framework for quality standards and the provisions for reforming the industry will enable those who work in it to make enormous advances in building on what has been achieved hitherto. It can only be in the interests of consumers to end the present need for water authorities to compete with other public services for limited resources and to finance

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the enormous investment needed with uninhibited access to capital markets backed by improved private sector efficiency.

The statutory water companies supply about a quarter of consumers and I should like to deal with the effects of the Bill on those consumers, the people who work in the industry and the shareholders. By and large, these provisions should be beneficial to the companies. They will be subjected to the same forms of regulation as the privatised authorities. Their financial restrictions are to be removed in so far as that is necessary to give shareholders the same protection as they have in a Companies Act company, and they are to be given the opportunity to convert to a public limited companies. These changes are of fundamental importance to the statutory water companies. Because of their system of regulation the interested shareholders hitherto have been limited and the companies have always thought of themselves as being customer-oriented. With the removal of dividend limitation there will be a considerable culture change. The customer will remain all important, but the shareholder will become of increasing significance.

I am most concerned that in making these historic changes the existing and future employees, shareholders, and consumers have their interests protected by the creation of a regime which allows competition with the authorities on fair and level terms. We are legislating for a unique industry in which a monopoly exists with 25 per cent. of that industry already in private hands. It would be most unfortunate if we were to disadvantage those already in the private sector by our proposals to bring the authorities into the private sector too. We must ensure that in creating the new structure and framework we do not create a situation where the authorities compete unfairly with the companies. We should do so during the passage of the legislation as there is to be no right of appeal against the licences.

With regard to existing debts, the Bill contains a provision which would enable the Secretary of State to write off or restructure authority debt so as to enable authorities to be floated on the market. Statutory companies, on the other hand, will have to continue to bear their current debt and its consequences. I hope that my right hon. Friend will bear in mind the importance of balancing the interests of the companies with those of the authorities. It is likely that if large amounts of authority debt were written off the companies would be placed in a much less favourable position for capital raising than the authorities. It is all very well to argue that on conversion to plc status the authorities will have their capital structures and debt equity ratios in their own hands. There will be a period before which they will have convetred to plc status and there may be great difficulties in achieving that status. I hope that my right hon. Friend will be careful to ensure that there is a level playing field at all times. The same argument applies to the terms of flotation of the authorities. It is in the Government's interests that the terms on which the shares are offered fully reflect the prospects of the undertakings, but in setting the flotation terms I hope that my right hon. Friend will ensure that the authorities are not in any way disadvantaged as against the companies.

That brings me to the question of protection from takeover bids following the flotation. In some privatisations, there have been protections from takeovers. It is

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undesirable that the authorities should be given protection from takeovers. What is certainly true is that it is not possible to give statutory water companies protection from takeover and that to give it to the authorities would obviously put the statutory water companies at a disadvantage in seeking to defend themselves against acquisition by water authorities. If my right hon. Friend seeks to give authorities some protection against takeover, a restriction should be placed on the ability of the water authorities to acquire statutory water companies. It is inherently undesirable to fetter the market, and I should prefer to see no restrictions whatever. Hitherto, the authorities and companies have operated under different financial regimes, both agreed by Parliament. That has led to the authorities having high levels of self- financing and high charges while the companies have had low levels of self- financing and low charges. The system of price increase control proposed in the Bill means that unless some way can be found of enabling the companies to increase their prices to a base comparable with that of the water authorities, they will be in a much worse position to earn a return on their assets in the new environment. That would be most unfair.

To increase prices for the purpose of achieving comparability with the authorities would be contrary to the law under which statutory water companies operate at present. It follows that a mechanism must be found through the proposed price increase formula which is currently being negotiated. There will have to be a substantial increase in the level of charges levied by the companies which is attributable to the change in form of the regulation and profit control currently operative to the price control envisaged in the Bill for the new plc environment.

With regard to the timing of the flotation of the authorities and the possible conversion of the companies to plc status, it would be wholly unacceptable if, for whatever reason, there was a period after the authorities were floated but before the statutory water companies were brought into full regulation and could achieve plc status. An even playing field in capital raising could not exist in such circumstances. There would also be serious implications for takeover activity in such a period. Yet under the Bill a small minority of a class of stock in a statutory company could hold up the conversion to plc status for a significant period, if not frustrate it altogether. It is likely that the time between Royal Assent to the Bill and the flotation of the authorities will be short. There could be serious consequences if the procedures for converting the statutory companies to plc status took longer. We must consider carefully whether small minorities of classes of stockholders in statutory companies should be able to frustrate the intentions of the legislation and deny the vast majority of stockholders their rights. We should examine whether the Bill can be improved so that such stockholders are entitled to receive financial compensation only if they can be shown in some way to have been unfairly treated.

At present, water company employees enjoy a pension scheme which was set up under the provisions of the Water Act 1973. It is proposed that, as a consequence of privatisation, that statutory basis should be removed. It seems strange that current statutory water company employees should have their pension rights so fundamen-tally affected by a measure which is essentially intended to bring the authorities into the private sector. If employees

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of the electricity supply industry are to continue to have a statute-based pension scheme, it is strange that there should be a difference between the treatment of employees in the two industries. I hope that my right hon. Friend will reconsider that.

Many of these matters can be addressed in Committee, but the House should bear them in mind, particularly as the licences will not be subject to appeal. The new plc regime will enable the industry to broaden its activities.

Finally, I should like to mention two ancillary aspects. The first, which is of great interest to many in the industry, is Water Aid. Water Aid began in 1981 as a response to the current Water Decade but intends to carry on after the decade. Currently a million people throughout the world are getting improved water and sanitation from projects supported by Water Aid, some complete and some still under way.

The necessity of massively improving the availability of clean water needs no repetition. Suffice it to remind the House that whereas in this country 1.2 per cent. of children die before the age of five, the figures in other countries are horrifying. In Sierra Leone, the figure is 30 per cent., in Gambia 29 per cent., in Ethiopia 25 per cent. and in India 15 per cent. The contribution of Water Aid in applying the funds raised from appeals to consumers, community groups and lotteries among water industry staff, together with overseas development agency and European funds, has been significant and something in which the industry can take pride. The contribution is being made in rainwater harvesting, tube wells, bore-hole pump refurbishing, sewerage systems and the like, and it means the difference between life and death for many people. Many of the organisations which have created Water Aid, whose income now approaches £2 million a year, will disappear with this legislation. Hitherto, water authorities have been unable to support water aid through their funds. Under these privatisation proposals there will be enhanced opportunities for the work of Water Aid to expand. It is a cause which means a great deal to many who work in the industry. Secondly, and finally, it would be open to the industry to set up a jointly owned consultancy organisation, perhaps on the lines of British Electricity International--an enormous commercial and technical success--to bring British expertise in water and sewerage management to a wider and needier world. That could be achieved on an entirely commercial basis with the assistance, where necessary, of the World bank, and European and ODA development funds. I hope that the industry will give this suggestion some consideration. I wish the Bill every success.

7.49 pm

Mr. David Hinchliffe (Wakefield) : The Bill is the most evil measure so far brought before the House by this profoundly evil Government. It strikes at the most basic and crucial of human needs--the need for water. We have been on this slippery slope for a number of years. The passing of the Water Act 1983 was significant in removing democratic involvement in local water provision and, instead, stuffing the water authorities full of Government stooges and enabling them to meet, as they do now, in

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secret, without the press being present. That is all part and parcel of the problems that have built up in the provision of water and the effects on our environment.

We have seen, too, the subsequent Government directives to water authorities, such as those lowering the levels of capital spending and borrowing for investment, which has major implications for the environment and pollution. The Government set artificially high profit targets in order to ripen the industry for privatisation and the way in which financial targets, but not targets for services and standards, have been imposed on water authorities certainly worries my constituents.

The results of those Government policies can clearly be seen. An example is the Yorkshire water authority, which I mentioned in a debate on river pollution about three weeks ago. Yorkshire Water is considered to be one of the most attractive investments for the individual entering into private ownership of water. In the past year, more than three quarters of Yorkshire Water's treatment works failed to meet EC standards, its sewerage works broke pollution inspectorate consents no fewer than 83 times, and it had 811 known breaches of consent. Alongside that must be put the fact that there has been a 40 per cent. increase in its profits, to £81.5 million. That is the contrast between what the Government are aiming for and what is really happening at local level, with the consequential effects on our environment.

Yorkshire Water's record clearly evidences what the Bill is all about. The Secretary of State's attempt to wrap up the Bill in environmental packaging is like the emperor's new clothes. We can see straight through them and we do not like what we see.

The idea of the National Rivers Authority was an afterthought, as the Government must concede. It was forced upon them because, with the 1986 White Paper, they were bringing in self-regulation. What absolute nonsense. It was forced on them by the EC, because it was frightened of what the extremists in the Government were proposing. For the Government, the Bill is all about one thing, the big "P"--profit. I shall refer to one area that has scarcely been touched on so far, the small "p"--proverty, which does not feature on the Government's agenda.

I believe that the Bill is probably the most serious attack on the poor by the Government. Conservative Members are laughing, but the implications for low-income families are frightening. In Yorkshire, within the past three years, there has been a twentyfold increase in disconnections. Last year, 560 families had their water cut off. If Conservative Members find that amusing I feel very sad, because the families concerned did not.

That has not happened only in the north of England. For example, in Bath, in the area of Wessex Water, 35 families were cut off in one day in September including a family with five children--one of them an eight-week- old baby--and a pensioner with a 17-year medical history of depression. That is the reality of what is happening in the water industry, and the situation will clearly worsen under the ownership of private companies.

Gordon Jones, the chairman of the Yorkshire water authority, who also chairs the national body of water authorities, said : "Water bills to double to an average of £200 per annum by 1993."

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That is under private ownership. The fact is that the 7,000 cut-offs last year will be nothing compared to the number that will be cut off under private ownership, which worries me.

What will happen to the huge numbers of people on low incomes, who need more water than most, when we have metering, which we surely will shortly after the Bill is passed? What will happen to low-paid industrial workers who, as my father did, come home in their muck and need to use a lot of water at home after carrying out a dirty job? What about those who before April would have had an automatic benefit increase when water rates were increased? What about the 50,000 sick and disabled who receive extra money for laundry and bath costs because of their individual problems? What about the 73,000 one-parent families who previously received assistance? What about the 139,000 pensioners, and the others of the 400,000 people, who received help before it was stopped by the Government?

As I know from being involved in social services work for many years, it is bad enough to be without heating and lighting, as many families sadly are-- living with calor gas and candles is no fun and to see children living in that environment is deeply worrying--but how will those people manage when they do not have water?

I am sorry that the Secretary of State and the Minister have left. I wonder whether the Secretary of State or the Minister have had young children or have cared for them. Are they aware that babies and young children occasionally soil themselves and need regular baths? Have they ever been concerned with looking after an incontinent disabled or elderly relative, who has needed regular bathing and whose clothes and bedding needed to be put in a washer several times a day? All those examples involve a large consumption of water. If Ministers had that experience they would not be proposing this legislation.

The Bill is the ultimate in Tory complacency and callousness. It is about people washing less often, cleaning themselves less often and flushing their toilets less often. [Interruption.] That is what metering will mean. Conservative Members laugh because they do not know the realities for many people. It is about people being deprived of their right to the most basic amenity--water. It is about profit and about pollution. It is about dirt, disease and above all, about Tory dogma--free market dogma--which was dead and buried a century ago.

7.58 pm

Mr. Roger Knapman (Stroud) : The Opposition Front Bench spokesman, the hon. Member for Copeland (Dr. Cunningham) and the hon. Member for Wakefield (Mr. Hinchliffe) have both said that the Bill is about Tory dogma. Fortunately we have also heard something about Labour dogma. Public control might have something to do with it, but we are not too sure any more about public ownership.

We have learned enough about Labour dogma, however, to know that the Labour party will be occupying the Opposition Benches for many years to come, especially since the hon. Member for Copeland has suggested that the statutory water companies are not in the private sector. That came as something of a surprise to the Minister and myself, but it will be even more of a surprise to the French water companies which have already invested several millions of pounds in those particular companies. The

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French are now unique, because they are the first people to want, voluntarily, to invest in a British public sector concern. I believe that Opposition Members are now pro-European Socialists. Therefore, I cannot understand why it is all right in France to have private water companies, but that our services must be administered by a nanny state.

As has been said, about 25 per cent. of the water industry is in private ownership. In my constituency, the water in one part is controlled by a water authority and in another by a water company. Housewives in Stroud high street may congregate and say, "Gosh, you are lucky, you get your water from the water authority, but I am obliged to have mine from the water company." I do not believe, however, that that is the case.

I congratulate my right hon. Friend on substantially adopting the 1973 structure of integrated river basis management. That was a great step forward compared with the hundreds of companies that then made up the water boards. I applaud the decision to carry out the privatisation of water on substantially the same geographical basis. I have no objection to privatisation--I do not believe that we have enough of it.

Mr. Allan Roberts rose --

Mr. Knapman : No. I shall not give way, because we are restricted to 10 minutes.

I do not believe that we have enough privatisation. We have had a long string of successful privatisation issues, including, of course, the much- quoted Jaguar. If more privatisation had taken place earlier we would not just be talking about Jaguar Cars plc, but MG Cars plc also.

The objections to the Bill might be summarised by a reference to the briefing from the Council for the Protection of Rural England. That organisation is not run by a bashful crowd, because it says that it forced the Secretary of State to create the National Rivers Authority. I suspect that it was pushing at an already open door. Nevertheless, if the council wishes to put it like that, so be it ; at least it says in its briefing :

"The creation of the National Rivers Authority is an important and greatly desired reform. The CPRE's long-held view is that the water authorities frequently fail to reconcile their role as water and sewerage undertaker with that of water regulator".

Quite so.

The first concern mentioned by the CPRE relates to the viability of local authority land assets :

"very substantial areas of unspoilt land in the countryside and towns are potentially vulnerable to new pressures".

It does not seem to recognise the Government's record of doubling the size of the green belt in the past few years. It also seems to be unaware that, in due course, a statutory code of practice will be introduced. The water authorities are already subject to the usual planning procedures and their operations in national parks are subject to the scrutiny of the national park committee. I believe that the CPRE's fears are unfounded. If we are not careful it will soon be believed that land must be publicly owned to ensure that it is "safe". That impression is already held by a few, but I do not accept it.

The CPRE's second concern relates to infrastructure provision and back-door development :

"Water PLCs may use their control of water and sewerage infrastructure to influence the location and pace of new development".

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The council must have a low opinion of local councils and councillors, who would resent any such interference. Water authorities can only advise the local authorities where the water and sewerage capacity already exists. That is the present system and it will be the system in the future.

The third concern of the CPRE is

"under-investment in sewerage facilities and pollution control." Pollution, of course, is the responsibility of the National Rivers Authority. With regard to sewerage there is, at present, more than £5 billion of collective debt. There is a massive debt and no equity. It is hardly surprising that Opposition Members approve of that because that is what they specialise in. I have a letter from the chairman of Severn-Trent Water who points out :

"debt conversion is bound to be a significant factor our capital structure, which at present is entirely composed of debt and no equity, already requires the payment of some £90 million per annum in interest".

The fourth concern of the CPRE is the lack of commitment and control of agricultural pollution. Unfortunately for the council, that fear was put in print just before the announcement from my right hon. Friend the Minister of Agriculture, Fisheries and Food that he would remedy the situation and change the system of grant. Over-abstraction of water is another CPRE concern. We are having metering tests in certain areas and no doubt that will be the subject of a contentious debate in due course. It is precisely the investment from private sources that will help to replace pipes in some areas where substantial leaks already occur. That is the best solution to the problem of the over-abstraction of water.

The most substantial benefit for the industry must be the creation of strong regional companies with a strong regional identity. There is a common thread between the privatisation of the water supply industry, the electricity supply industry and, in due course, the privatisation of, I hope, British Rail, on a regional basis. As a result of the water privatisation, we shall have 10 companies spread around the country and the privatisation of electricity will create 12 new companies. I hope that when British Rail is privatised, four or five more companies are created. All those companies will help to cure one problem about which I constantly hear in my constituency--the feeling that too much wealth and too much influence has gone to the south-east and especially to London.

I believe that strong regional companies will help to redress that balance. I support the Bill and congratulate my right hon. Friend on the way in which he has put it across.

8.6 pm

Mr. Jimmy Wray (Glasgow, Provan) : Nobody is fooled by the Bill, which is a national disgrace. The robbers of our national resources are sitting on the Conservative Benches. I would not like to be left in the desert with a pail of water and the Conservatives. We know exactly what would happen.

It is clear to me that no Government would sell for nothing a resource with assets worth £27 billion, 435,000 acres of prime land and an income in 1987-88 of £3 billion

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gross with a profit of £740 million. Those assets and income are the reason why the Government want to privatise the industry. Who are the big buyers? The hon. Member for Stroud (Mr. Knapman) has already said that the French are investing, but what are they investing? Three French companies have already started to invest before the Bill becomes an Act. Ge ne rale has already bid £57 million for two of the regional water authorities. Of the 29 private companies in the statutory sector, it has invested in 10. Lyonnaise has made a £67 million bid for Essex and East Anglian water companies plus £60 million for the Newcastle and Gateshead and Sunderland and South Shields water companies. SAUR has invested in a joint venture with Trafalgar House. That investment tells a story. If those companies were really interested on British consumers, why have they sold two of the four London companies that they bought not long ago to Ge ne rale at a handsome profit? They have agreed to offer another bid of £68 million for three more water companies. The hon. Member for Cambridgeshire, South-West (Sir A. Grant) asked what a Labour Government would do. We shall nationalise the water industry and the gas industry. Anything that has been privatised by the Government will be returned to those to whom it belongs. The Council for the Preservation of Rural England represents those people with the most experience of the land and it is worried about the Bill. It knows that the private developer will rape the unspoiled landscape of the Welsh valleys and sell out for profit. The National Rivers Authority will have less power than the IRA by the time the private companies have finished with it. They will use the back door methods and the way in which they will do that can be seen when one looks closely at the Bill. They will set up subsidiary companies to which to transfer the land and then sell them off.

The Central Council of Physical Recreation is also worried about the Bill. Clause 7 says that the Water Bill places a duty on every relevant body. Clause 7(6) defines "relevant body" as the National Rivers Authority, a water undertaker, a sewerage undertaker or an internal drainage board. It says nothing about subsidiary bodies. That is the loophole that the private companies will use. The protection of public rights of access is further eroded in clause 7(5), which gives the National Rivers Authority and private water companies an overriding power to charge. That is what this is all about. People will have to pay to go to every park and golf course. All the luxuries of the beautiful rivers and parks will be for the rich--for those who can afford them for themselves and their children.

I hope that the Central Council of Physical Recreation will be consulted on the environmental and recreational code of practice. It is worried about the lack of consultation so far and it wants to discuss clause 9.

Another organisation. and one dear to my heart is the National Anti- fluoridation Campaign, which is worried about the standard of drinking water and who will be responsible for it. We now realise why the Government had a large majority when it decided to fluoridate the public water supply. It knew that in two or three years' time a few bucks would be made and that Fisons would be breathing down the necks of the private companies to pollute the water with fluoride. What answers can we give that society about fluorocylisic acid and its dangers and diseases such as skeletal fluorosis, dental fluorosis and

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chronic fluorine poisoning? Who will be the underwriter? Who will indemnify the consumer? The Bill says nothing about that. We recently read in the newspapers of the danger of cancer from London's drinking water and from polycylic aromatic hydrocarbon. Cleaning up would cost £1 billion and who will pay for that--the taxpayer? Nobody wants to privatise the non-profit-making side of water, so we shall end up with the bill.

The Consumers Association is worried that the Director General of Water Services has insufficient power. The association is worried about the consumer. The Government have proposed a staff of 80, which also includes the support staff for the customer service commmittee. That is not sufficient to enable the director general to investigate consumers' complaints.

We are worried about the monitoring of pollution in public water supplies. The director general will give that work to private enterprise and we do not trust private enterprise to do the job properly.

The Bill should end where is belongs--in the dustbin. It is a thieves' charter. It allows the nation's resources to be stolen. 8.16 pm

Mr. Keith Raffan (Delyn) : It would not be surprising if, after the over-the-top speech to which we have just been treated by the hon. Member for Glasgow, Provan (Mr. Wray), Glasgow, Provan goes down the drain and joins Glasgow, Govan at the next general election. Water, as one may have gathered from the debate, is a highly political and contentious issue in Wales. I am glad to see that colleagues from the Principality are present. In the Principality we sometimes describe it as a "burning" issue.

The work of the Select Committee on Welsh Affairs in the 1979-83 Parliament was dominated by a two-and-a-half-year inquiry into water in Wales. Water also played a significant part in the Committee's work during the last Parliament when we undertook an inquiry into coastal sewage pollution in Wales.

During that inquiry in December 1984, following a discussion on the Welsh water authority's capital programme, I asked the chairman : "Perhaps you would rather be in the position of a private company so that you would then be able to borrow according to your needs?" Mr. John Elfed Jones, the chairman of the Welsh water authority, replied :

"The proposition has immediate appeal."

The water industry has for far too long been prevented from raising capital to meet heavy capital expenditure programmes to improve the quality of water and sewage treatment. Privatisation will free the water authorities from the constraint of the Government's external financing limit, enabling them to borrow more money as required, so that they will be able to accelerate their capital programmes.

That is particularly important for the Welsh water authority. It has the longest coastline of any water authority in the country--1,300 km. It has 130 sea outfalls discharging into coastal waters--over 25 per cent. of the total in England and Wales. Of those 130, only 42 are deemed satisfactory. Only 6 per cent. of them are under 10

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years old--these figures are well known to hon. Members from Wales--75 per cent. are over 20 years old and 40 per cent. are over 40 years old.

The virtue of the infrastructure that the water authorities are now providing is its longevity. There is an ongoing benefit of 50 to 100 years from the capital expenditure undertaken. Therefore, there is a strong argument that they should be able to borrow more. Privatisation will allow them to do so.

Government interference and constraints are not limited to finance. The water authorities are not allowed to engage in profitable business activity unless it is incidental to their main statutory responsibilities. As my right hon. Friend said when opening the debate--other hon. Friends have also mentioned it since--the French water companies have diversified and developed new lines of profit. They have diversified into communications, construction, waste disposal, supplying water internationally, industrial heating, leisure, health services and even funeral services. They have developed worldwide interests in North America, Africa and the far east.

Privatisation will give the water authorities commercial freedom and allow them to exploit commercially their skills, expertise and experience. In that regard, the Welsh water authority has nothing to fear. It is the only authority with a tidal waters unit, and one of only two with a virological laboratory. It has also developed several computer software packages.

Privatisation will lead to a new approach based on an imaginative enterprise culture, rather than a stagnant, stale public sector culture such as the present one. There is tremendous scope for international consultancy, especially in the United States, where the water industry is so fragmented. There is scope for international water contracts, and for more local services, particularly in leisure.

Water authorities must think more commercially about property and about freeing surplus assets. What is so wrong about that? Assets such as old sewage works on the edges of towns may allow houses to be built which might otherwise have to go up in greenbelt areas. Water authorities should also make their remaining assets work harder. Before 1974 the water authorities were responsible for monitoring pollution and the district councils' predecessors were largely responsible for sewage discharges. After reorganisation, the water authorities became responsible for both roles. That prompted the 10th report of the Royal Commission on environmental pollution, which was recently echoed by the Environment Select Committee, to say that water authorities were becoming poachers as well as gamekeepers. When the committee of Welsh district councils gave evidence to the Select Committee on Welsh Affairs during the coastal sewage pollution inquiry, it called for an independent authority to assess the discharges that were taking place. That is precisely what the Government are providing by setting up the NRA to take over water authorities' regulatory functions.

One of the great fallacies of public ownership is the assumption that because an industry is nationalised it will automatically look after the public interest. Labour cuts in the middle of the last decade gave the lie to that. Capital spending in Wales in 1976-77 by the Welsh water authority was £32.9 million. The then Labour Government had to crawl, humiliated, to the IMF, and the hon. Member for Alyn and Deeside (Mr. Jones), who was a member of that

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Government, tried pathetically to apologise for their bankruptcy in the Welsh Grand Committee and the House.

By 1987-88, the water authorities' spending had risen to £67.8 million. That is the difference between Labour "caring" and our action, which is action for the people to ensure that they have a clean water supply and that sewage is treated properly. As my right hon. Friend the Secretary of State said, we are making up for the neglect of the last Labour Government--

Mr. Elliot Morley (Glanford and Scunthorpe) : Will the hon. Gentleman give way?

Mr. Raffan : I have no time.

There will be competition under privatisation--competition for investment funds and competition between water companies to prove which is best. Whatever it may be called--competition by comparison or yardstick competition--it is still competition. Privatisation will achieve an efficient balance between controls and incentives. All the Opposition scares are given the lie by the 29 privately owned statutory water companies, which are both efficient and safe. The Opposition have indulged in scaremongering. Yet I was intrigued to read in the newsletter put out by Wrexham Water, one of the 29 companies, the following item :

"Praise from MPs Three Clwyd MPs"--

all of them Labour and one of them a Front-Bench spokesman-- "praised Wrexham Water Company for the work it does in maintaining the quality and safety of its water supplies to customers." If privately owned statutory water companies can be efficient and safe, why cannot the new plcs? If Labour Members are satisfied with the present private water companies, why can they not be satisfied by the highly regulated new water plcs?

Accelerated capital programmes, greater environmental protection under the NRA, and more commercially minded entrepreneurial water authorities are all sufficient reasons for Conservative--indeed, all sensible--Members strongly to support water privatisation. Nationalisation never served the consumer well, especially under the Labour party, which slashed expenditure on capital programmes for water infrastructure when in power. Privatisation will serve the customers of Britain and of Wales much better.

8.26 pm

Mr. Andrew F. Bennett (Denton and Reddish) : I was interested to note that the hon. Member for Delyn (Mr. Raffan) did not answer the question of how far the Bill would help to allay the continuing resentment in parts of north Wales about the way in which certain communities were destroyed by drowning their valleys to provide water for the big English cities. The Bill will increase the resentment of many of those communities. Now their homelands will be used not only to provide water but to provide profits. I should have liked to hear how the hon. Member for Delyn would avoid fuelling that resentment. I am a little disappointed, Madam Deputy Speaker, to see you in the Chair ; I had hoped to see the Chairman of Ways and Means because I wanted to remind him that as

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a youngster he larked about around the Audenshaw reservoirs in my constituency. The reservoirs there were a monument to the municipal enterprise of Manchester, which developed them and went on to create reservoirs in Longendale at the turn of the century and, just before the second world war, the reservoirs in the Lake district. The other cities and towns around Manchester also developed a series of municipal water undertakings, all of them a monument to the public-spirited investment of local authorities of that time. They provided high quality pure water for the cities and towns. Interestingly, those water supplies have lasted well as good investments, but they would not have offered the short-term return that private companies want. Their returns have come in over a long time. In most of those cities, the pure water supply is far better than the sewerage systems, many of which were provided by the local builders who put up the houses. They went for the cheapest systems that they could find and the systems are now in a sorry state because the builders did not share the enthusiasm for long-term investment as opposed to short-term profit.

I also note that the water undertakings in those big cities protected large parts of the Pennines and Lake district from being built over, and from factories and pollution. It is regrettable that the water authorities did not open up the land sooner to public access for recreation and enjoyment. I understand the problems : at one stage the water was collected and had to be kept as pure as possible because there were no treatment works. Now, in the north-west particularly, and in other parts of the country, the water undertakings protect large tracts of land. About 150,000 acres in the north -west are held by the North West water authority ; half of those acres are in areas of outstanding natural beauty or national parks. A considerable number of recreational amenities in the north-west are provided by the water authority. There are many permissive footpaths, picnic areas, viewing points, and so on.

In the Peak district, about 15 per cent. of the national park is held by the water authority. Around Thirlmere about 10,000 acres of land are held by it and the same pattern applies in Wales around the reservoirs of Brenig, Elan valley and Lake Vyrnwy. The Countryside Commission--I remind the Minister that it is a Government body--is concerned, as are a large number of voluntary bodies, that areas which have been protected by water undertakings will no longer be protected.

Some hon. Members have spoken about whether we will suffer through intensive agricultural use of the land. I am not sure how much will be intensively cultivated, but I am sure that there will be increasing pressure to afforest much of the land and that much effort will be devoted to getting the trees to grow as quickly as possible. We have seen the indiscriminate use of fertiliser from the air in many afforested areas. If the profit motive enters into the management of the land, it may be spoiled for public enjoyment. There will also be pressure to create money-making recreational areas. It is difficult in such areas to separate the recreational demands, but it is likely that the profit-making activities will be high on the list. There will also be pressures to reduce conservation and access. I am worried about clause 7 and I would like the Minister to give a clear undertaking that the Government do not

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intend to reduce access to areas now owned by water authorities. Perhaps he will explain the meaning of the following words in clause 7(2)(a) :

"to have regard to the desirability".

We should insist on something much stronger to preserve public rights of way and guarantee access to woodlands, mountains, moor, heath, down, cliff and foreshore. The Bill should not use the wavy word "desirability".

The Bill puts charges in the negative and says that there will be no requirement to provide items free of charge. When I intervened on the Minister he said that there was no intention to impose charges. He should put on the face of the Bill that there will be no charge for the things that are presently provided. As soon as the profit motive is introduced, there will be a temptation for companies to charge for all sorts of things, and without payment, access to the countryside may be reduced. If the fears expressed by ramblers and members of other organisations are totally unfounded, it would be simple for the Minister to say that an amendment will be made at the earliest possible moment to make it clear that there will be no charges and no restrictions on access. From the way that the Bill is worded, I fear that that will not be the case.

When I was a youngster, walkers and climbers resented the water authorities which kept people off their land. I should not like to see that conflict returning to the countryside around Greater Manchester in which I walk and climb. It will be a sad day if that happens. At one time when people saw notices saying "Keep out" and were told by the water bailiffs that they were not allowed to walk over certain areas, they took it out on the water authority. They did not stage grand demonstrations, but they showed their resentment of the water authority in what were perhaps silly and petty ways. When I was a kid I was often turned off rock climbing areas by water bailiffs, but as soon as the bailiff's back was turned we returned and made defiant gestures which certainly did not help the purity of the water supply.

That sort of resentment could easily return to such areas if the new water authorities start to restrict access. I know that they will not do that on a grand scale to start with, but there will be a little erosion here and there. We shall see the removal of the traditional right for people to walk over an area although such an area is not a public footpath. The Minister should get rid of those areas of doubt at the earliest opportunity. He should give an undertaking that there will be no powers in the Bill to allow the new companies to charge for access to their land and that people can continue to use such land for recreation. The Government should say that they will not allow those bodies to restrict access to areas that people have traditionally used and should make it clear that they want to see an expansion of access to water authority land for recreation.

In our crowded country we need to use every available bit of land for recreation. To have people making profits out of such land is totally wrong. I agree with my hon. Friend the Member for Newham, South (Mr. Spearing), who spoke about what might happen if water companies speculate in international markets. Who will be responsible for sewer rats? Are they to be bought and sold? That could be a major problem, because if people are making profits out of their management there will be a temptation to take short cuts and someone else will be left with the problems. We know that many problems are developing because of decaying sewerage systems. The

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