House of Commons Hansard Debates for 7 Dec 1988

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Minister should make sure that the water companies do not take the profit and leave the local authorities and public health authorities to deal with the problems.

8.36 pm

Mr. Dudley Fishburn (Kensington) : Perhaps it is because I am a new boy in the House that I often find that it is Opposition speeches which convince me most about the correctness of the policy pursued by the Government. That has never been truer than on this occasion, given the content of the speech by the hon. Member for Copeland (Dr. Cunningham) on the Opposition Front Bench. He made four points, all of which are splendidly wrong. The first was that because water is a public and universal commodity it should be publicly controlled and supplied. It is precisely because it is so universal a commodity that it should be privately and competitively controlled and supplied. There is a case for a Government seeking to control something that is unique or rare, which comes into the country only at great cost and difficulty to the Government. However, there is no case for a Government to seek to control the supply of so natural a commodity as water. The Roman Senate once tried to control the monopoly supply of glass. The policy was not very effective, but at least it had more logic to it than the policy put forward by the Opposition to control the supply of water.

The second argument advanced by the Opposition is that water is unique in that it is important for the health and well-being of the community--and therefore also should be controlled by the Government. I agree that water is unique in so far as it is essential for the health and welfare of our people. It is for that very reason that its supply should not be under the control of a monopoly. One has only to have a slight sense of history to remember the appalling decision by this House a generation ago to seek control of the supply of salt, a vital commodity in India, and then to tax it. The great Mahatma Gandhi then led his famous march to the Indian ocean to privatise salt by scooping it up with his own hand away from Government control.

The third Opposition argument was that profit was somehow inherently wrong. How does the hon. Member for Copeland wish our water undertakings to be run? Are they to incur a loss or are they to break even? Does he not realise that a loss by a Government monopoly is a subsidy paid for by a tax on somebody else's profit? When the water undertakings are privatised and are public limited companies, we shall see them making profits, and the Government will reap the benefit in corporation tax. That will be more money to the Exchequer than even the most rapacious Opposition Members could wish for. Nearly £22 billion has been reaped into the coffers of the Exchequer from companies that have been privatised since 1979.

The hon. Member for Copeland argued that the water industry should remain a public monopoly. He conveyed the feeling that somehow the Government should control the water industry and that the man who sits on the Government Front Bench should be the controller and chief executive of one of Britain's great industries. We well remember Conservative and Labour Governments interfering with British Steel, repeatedly making political judgments, which did so much harm to the company in the 1960s and 1970s.

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I have great respect for my hon. and learned Friend the Minister for Water and Planning. He is a distinguished barrister, a distinguished parliamentarian and, not least, a distinguished resident of my constituency. He does not have among his skills, nor would he say that he did, the ability to be chief executive of the country's water undertakings. The quicker he talks himself out of that job--I am delighted that he will be doing so over the coming months--the better it will be for us all.

Finally, we heard about the Opposition's discovery of open spaces and nature. The hon. Member for Copeland quoted, in a hackneyed way, Shakespeare and Wordsworth. It says something of the self-importance of politicians that they do not turn to Evelyn Waugh on such occasions. The great naturalist, Scoop, recalled how

"feather-footed through the plashy fen passes the questing vole." Perhaps these days it should read "passes the quest for votes". A bucolic charm has come into this water debate. But I come from an inner-city area, through which no sylvan waters flow. The Kensal canal inks its way along the border of my constituency as a demilitarised zone between the hon. Member for Brent, South (Mr. Boateng) and the Socialist republic of that borough. Yet we, who live in tower and mansion blocks, have as great an interest in clean and pure water being cheaply delivered to our community.

We are delighted with the increased efficiency of Thames Water as it moves to privatisation. As it does so, we shall have a company that we know about ; that we can go along and kick ; that as hon. Members we can lobby to ensure not least that those who cannot afford water do not have it cut off ; and to make it part of our community. When Thames Water is floated on the stock market, one of the first things that I will do is to request that it supports another float--a float in my constituency's famous Notting Hill carnival.

8.42 pm

Mr. Clifford Forsythe (Antrim, South) : At one time I might have had to declare an interest because I used to be a plumbing contractor. Perhaps the House will forgive me, therefore, if I speak in practical terms.

Having listened to Conservative Members, the logic of giving a public utility to private companies escapes me. It is a sad reflection on the Secretary of State and the Department of the Environment that they believe that by transferring public utilities to private companies they will be able to make a profit. Why could not the Government get the economics of the public utilities right, and therefore give money to the Exchequer? If the private companies make a profit, they will do so at a cost to some of their other operations.

As a former plumber, I wonder from where the competition will come. Water mains and service pipes are already in place underground. Will there be different coloured water to show that it is coming from different firms? Will the private companies build new reservoirs or fit new water mains? There will be no competition if there is only one set of water pipes.

It is at least heartening that a number of restrictions will be placed on the private companies. From a practical point

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of view, they will need to be tightly controlled. It is also heartening to know that on 1 January 1989 the model byelaws will be implemented by the Government.

Many new plumbing operations will be introduced. It has been suggested that there will be no more storage tanks and that the single-pipe system will be supplied off the mains. If a private company's water main bursts and is losing a lot of water, what will happen if it decides, to guard its profits, to turn off the water mains to prevent an even more serious leak, leaving householders without water? That possibility must be considered carefully and seriously.

Plumbing contractors in Northern Ireland formerly came under the control of the Belfast water commissioners. All plumbers working under its auspices had to be licensed. If a plumber did not have a licence he could not work on the water supply. It amazes me that that is not the case in the rest of Britain. There is no compulsory list of plumbers, so private companies supplying water will be entitled to employ anybody to fit plumbing. If there is no compulsory list of plumbers who can show that they know what they are doing, many of the problems of the past will become worse in the future.

Mr. Ashby : Is the hon. Gentleman aware that the Bill does not apply to Northern Ireland?

Mr. Forsythe : I am entitled, as an hon. Member, to speak. [Interruption.]

Mr. Ashby : I do not want to discuss the matter ; I merely felt that the hon. Gentleman might be reassured by that knowledge.

Mr. Allan Roberts : On a point of order, Madam Deputy Speaker. The Government have said that they intend to introduce these measures in Northern Ireland.

Madam Deputy Speaker (Miss Betty Boothroyd) : The hon. Member for Antrim, South (Mr. Forsythe) is perfectly in order to speak on the Bill. He is an hon. Member of the House.

Mr. Forsythe : I am most disappointed, in this democratic House, that an hon. Member should question another hon. Member's right to speak.

I was saying that there must be a compulsory register of plumbers or those entitled to work on water undertakings. To put the matter in context, I ask the Minister to give the meaning of clause 180(5), which says :

"This section and the following provisions of this Act shall extend to the whole of the United Kingdom, namely--

(a) Schedules 2 and 5 and sections 3, 11 and 22 so far as relating to any scheme under either of those Schedules ;

(b) Section 88 ; and

(c) any amendment or repeal by this Act of any provision contained in the Parliamentary Commissioner Act 1967, the House of Commons Disqualification Act 1975 or the Northern Ireland Assembly Disqualification Act 1975."

8.49 pm

Mr. Henry Bellingham (Norfolk, North-West) : It is a pleasure to follow the hon. Member for Antrim, South (Mr. Forsythe), not least because my party is the Conservative and Unionist party. We should applaud the fact that the hon. Members for Antrim, East (Mr. Beggs)

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and for Londonderry, East (Mr. Ross) are listening to and participating in the debate. I hope that they will join us in the Division Lobby tomorrow night to support the Bill.

The Bill has given rise to great interest in west Norfolk, not least because it is the land of Vermuiden. Much of my constituency is land that was reclaimed in the 17th century and drained. Much of it is below sea level, so coastal and sea defence aspects are important. My constituency is dominated by the River Ouse, which has many tributaries. It is part of a large river basin which will form the key to the new local companies.

Originally, there was some suspicion about the water privatisation proposals. My constituents were under the impression that crucial functions, such as coastal drainage, coastal defence and water pollution control, would be part of the functions of the plcs and were afraid that there would be a conflict of interests. That is why I welcome the Government's moves to separate the two functions, to set up the National Rivers Authority and to take out that part of the industry that can be profitable and sold to the public and to put the other into a new framework. I find that there is now broad support for the Bill and great support for the NRA.

It is interesting that most, if not all, of those groups and bodies that Opposition Members have cited as opposing the Bill have welcomed the creation of the NRA. This is a move in the right direction. Pollution control is far from perfect. My hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) said that 20 per cent. of the sewage plants breach the discharge consents laid down by the Department of the Environment. That is a disgrace. The number of reported pollution incidents has increased from 12,000 in 1982 to 23, 000. In 1986 there were only 250 prosecutions. The penalties are far too low.

We have heard about fishing. I understand that the eels caught in 31 rivers were so contaminated by pesticides that they could not be eaten by anyone. My right hon. Friend the Secretary of State is a keen fisherman and is concerned about river pollution and angling. Some rivers are a disgrace. Obviously, the Control of Pollution Act 1974 is not working. If the NRA is to work, it must have sufficient funding and staff, and have deadlines to which to work.

I am slightly worried about sea defences. Under existing arrangements, borrowing powers can be assumed in a low rateable area. I hope that my hon. Friend the Minister will address himself to this point. What will happen under the new arrangements? We have heard much about the greenhouse effect. If the sea level increases by 2 ft or 3 ft, my constituency will disappear.

Mr. Paul Boateng (Brent, South) : That is the best argument that the hon. Gentleman has made all night.

Mr. Bellingham : The hon. Gentleman is being unfair. Those psychedelic socks of his are putting me off.

Most of my constituency would disappear, as would a great deal of the Queen's estate at Sandringham. Water would lap up the front door at Sandringham. That would be a disaster. That is why we must get our sea and tidal defences right. I hope that my hon. Friend the Minister will address himself to those important points. The NRA can work. I hope that those powers vested in the Secretary of State under the Control of Pollution Act will be vested also in the NRA.

We have a long way to go, but separating these two functions is a crucial move in the right direction. I urge the

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Government to adopt a more radical stance and to consider the new structure carefully. Her Majesty's inspectorate of pollution is to be restructured and put on a regional basis. There is a strong argument for a new, integrated, pollution control structure. This would mean creating a body along the lines of the United States Environmental Protection Agency. We could have a national EPA, but one with regional centres which would be advised by not only the NRA but by that part of HMIP that deals with air pollution and toxic waste. The waste disposal authorities would be integrated into the regional centres. The WDAs have not served this country well. Many have refused to file reports to HMIP. Many are not properly funded, which may be partly the Government's fault. This is an opportunity to set up a more radical structure, whereby functions such as air pollution control and waste disposal are under one roof on a regional basis. I hope that my hon. Friend the Minister will comment on that suggestion.

Surely, with HMIP being restructured and the WDAs, which are part of local authorities, coming under increased pressure and criticism, the time has come to take these functions from local authorities and give them to regional organisations. That will leave local authorities free to concentrate on planning and on vetting planning applications.

The new water authorities will have control over the licensing of new waste disposal facilities and will be able to say whether sites may go ahead. They will be able to impose a veto if they are worried about leachates or geological factors. Why not give them more say and control and take that function from the WDAs? Local authorities will be able to concentrate on what they are best at doing--imposing planning controls and considering planning aspects. I hope that my hon. Friend the Minister will take those points on board and put them to our right hon. Friend the Secretary of State. I hope to be a member of the Standing Committee, where there will be opportunities for us to pursue those points. A number of Opposition Members feel equally strongly that this opportunity to introduce an integrated approach is not to be missed.

I well remember that every time I met the chairman of Anglian Water, Mr. Bernard Henderson, CBE, he said, "We are hamstrung by Treasury controls. Every time we want to invest, we cannot. We have a negative external financing limit. When we want to borrow money for new investment or to put money into new infrastructure and plant, we cannot. When we can, we are hidebound in terms of how much we can borrow and the extent of our capital expenditure." He, among many other water authority chairmen, may welcome water privatisation and these new privatised plcs being let off the leash and able to serve the public as they want by spending sufficient funds on capital investment and, at the same time, not having to worry about some of the other functions that will rightly remain in the public domain. I support the Bill because it represents an excellent way forward and a unique step during the Government's tenure in making major progress on the environmental front and, above all, in presenting to the public a better service and a cleaner environment.

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8.58 pm

Mr. Dafydd Wigley (Caernarfon) : I agree very much with the hon. Member for Norfolk, North-West (Mr. Bellingham) about the need for a regional, co-ordinated structure. My real fear for Wales--although we look on Wales as a national unit, we regard it in regional terms from an organisational point of view--is that the rivers authority will impose centralisation. We shall lose the river functions that exist on an all- Wales basis and we are far from happy that there are sufficient provisions in the Bill to deal satisfactorily with rivers in Wales.

The hon. Member for Norfolk, North-West spoke of obtaining more capital, but whether the plcs concerned will be able to afford to attract that capital and at what price will be central to the argument. The hon. Member for Delyn (Mr. Raffan) said that water was a burning issue in Wales. It certainly is and, many years before he came and graced our presence in Wales, we had a very difficult time there.

The hon. Member for Denton and Reddish (Mr. Bennett) mentioned the considerable controversy involving cities such as Liverpool and Birmingham which took over valleys in Wales to provide reservoirs, as a result of which people were moved out. Legislation was enacted in Parliament, against the united opposition of all Welsh Members, across party lines, but there was still considerable controversy. In the 1960s, there were episodes of water pipelines being blown up. That was a difficult time.

It is difficult to imagine how much change there has been in perception and understanding since that time. Although Members on both sides of the House will criticise the Welsh water authority from time to time--no doubt there are times when they are right to do so--over the intervening two decades new harmony and planning has come about in the provision of one of the most basic services of the community--the provision of water, including sewerage, flood control and pollution control.

I fear that we are now moving backwards, not to Victorian times but to a pre-Victorian time. One of the first most exciting steps in municipal development was the provision of water and sewerage services in some of our large cities. I am gravely concerned about the effect of the Bill in Wales. The balance sheet of the Welsh water authority shows that the current cost net asset value is about £2,000 million and the turnover is about £223 million. If we wanted to obtain a return of 10 per cent. on that £2,000 million in the market place, we should be looking for £200 million profit. In other words, we should be looking to increase the turnover from £223 million to about £423 million, which represents a doubling of the total charges. Clearly, that is not on and I am not suggesting that charges will increase by that much, although I have real fears that they are bound to go up a considerable amount.

If the charges do not go up by that much, the assets of the water authorities, which have a book value of just under £2,000 million, will be sold off for a fraction of that sum. If I understand the position correctly, the Welsh Office is looking for a figure of £250 million to £300 million for those assets. That is one sixth or one seventh of their book value. That is giving away public assets which have been paid for by the water ratepayers of Wales. On what grounds can that be justified?

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It may be possible to have a write-off which makes it practical to appear to have a reasonable return. Perhaps the £27 million profit last year can be pushed up to £30 million or £40 million and a reasonable return appear on the cost of the shareholding. When we look for additional capital to undertake the sewerage replacement works and all the other works that are needed, there will be no write-up or grant provision. The system will have to stand on its own two feet. That is where the valid comparison comes in for a return on the £2,000 million equivalent that we are now discussing. However, if we dress this up for a one-off sale, to justify increased capital in the future--that is the argument advanced by Conservative Members in favour of privatisation, and I accept the need for additional capital--there will have to be a substantially higher profit margin. That must mean higher prices, and it will hit some of the most vulnerable people very hard.

The question of answerability and control has also led to much discussion in Wales. At present, we have a quango. I should be much happier if the Welsh water authority were answerable directly to an all-Wales elected body, but that is not on the agenda at the moment, although we are hoping to work in that direction again before too long. In the meantime, if privatisation is to take place--we are unlikely to stop it with the balance of power in this Parliament--what safeguard can be provided to ensure that water consumers in Wales have a dominant part of the equity capital? This issue was raised by the hon. Member for Brecon and Radnor (Mr. Livsey). I understand that the Welsh Office, with the Welsh water authority and institutional investors, has been considering various options.

Mr. Leigh : Will the hon. Gentleman give way?

Mr. Wigley : No, I shall not give way as there is a 10-minute limit on speeches.

Perhaps 60 per cent. of the equity shareholding could be in the form of A shares and designated for consumers. I and others are worried that after consumers have bought the initial share-out the shares will pass into the hands of institutional investors. We know that the television company for which the Minister of State, Welsh Office, formerly worked--HTV--introduced share restrictions to ensure that the shareholding reflected tight control of the company so that the company could maintain the policy which had led to its securing its franchise.

The Government should find a way of ensuring that a mechanism is found to enable consumers, even those with small incomes, to secure a share so that the overall control of Welsh water is at least indirectly in the hands of Welsh people. Is it practical and feasible--this is an issue that I raised as a member of the Welsh Grand Committee this morning, in response to which the Secretary of State indicated some sympathy--to have a form of a golden share in the Welsh Office to ensure that issues of public concern in Wales are subject to a longstop and are not determined merely by pure market considerations?

Many bodies have made representations to us on these issues, including those representing anglers, farmers, ramblers, those with an interest in bird life, outdoor educationists and consumers. The Countryside Commission is a specific example. Welsh constituency Members are well aware of the range of problems which arise, including those associated with the water charges, cut-offs, floods, pollution, sewer replacements, inadequate

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pipes, fish farms and coastal erosion. All these matters will have to be dealt with by the proposed new bodies. My heart tells me that an organisation that is geared to commercial profit only cannot meet the problems that we and our constituents come up against week by week and month by month.

If I am lucky enough or unlucky enough to be a member of the Committee which considers the Bill--an enormous amount of work will face those Members--I hope that those on the Government Front Bench will be flexible in their response to practical amendments tabled to protect the interests of those who might suffer if purely commercial considerations alone are taken on board. We must not slip back into the days of contention of the 1950s and 1960s in Wales. There must be a structure which ensures that the necessary safeguards are provided.

9.8 pm

Mr. David Ashby (Leicestershire, North-West) : I welcome the Bill, and I think that there are many who take the same view. They are unhappy that regional authorities have not fulfilled all that was expected of them. They expect and demand higher standards, and we all recognise that those standards are required regardless of whether there is privatisation. I agree with my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) that fundamentally the Bill is directed to raising standards as well as privatisation. It provides for a massive raising of standards, and we must understand and accept that there is a cost to raising standards. If we are to improve the environment, we must spend more. That is a cost which I am sure we all willingly accept because we want to improve the environment and our standards.

The Bill recognises the necessity of environmental and regulatory controls. It reflects the need for those controls to remain in the public sector. That need will be met by the National Rivers Authority and the Director General of Water Services.

I want to speak briefly about the National Rivers Authority. The fight against the pollution of water courses too often makes the headlines only when a disaster occurs. Pollution is a chronic phenomenon and is produced by a combination of sources, as a result of our way of life. In consequence, the fight against pollution must not be limited to ad hoc measures designed to repair extensive and sometimes irreversible damage at great expense. Instead, it must take the form of long-term action to tackle the causes of pollution. The pollution of water courses is not caused solely by large industries. It is caused also by the citizens of this country, as consumers and producers of products, or by activities that result in that pollution. The solution must be that we consider not only sanctions, but the education of those people who are involved in activities that could pollute water courses.

Therefore, I hope that the Minister will take on board the point that the National Rivers Authority must be able, not only to prosecute or impose sanctions, but, equally important, to raise public awareness of these problems. It must have a role in advertising and a role to educate. It must be able to put on exhibitions and to provide advisory services for those who are involved in activities that might cause pollution.

That is the most important point that I wanted to make. I promised that I would not speak for 10 minutes and I

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said that if I was called, I could say what I wanted to say in three or four minutes. That is the message that I wanted to put over.

9.12 pm

Mr. Paul Boateng (Brent, South) : The surest sign of a poor advocate defending an even poorer case is the large number of character witnesses that are traipsed before the court as a sign of the worth of the indefensible. In the course of this debate, we have seen a number of character witnesses traipsed before our eyes in defence of the indefensible. One of those witnesses, bizarrely, was the grandfather of the hon. Member for Crawley (Mr. Soames)--that is, an early right hon. Member for Woodford, Winston Churchill. We were told that, were he alive, he would be a great supporter of water privatisation. His own knowledge of clear white liquids--like that of his distinguished grandson--was limited to those clear white liquids that are produced in vats in Warrington rather than those that descend from heaven.

Juxtaposed even more bizarrely with the late right hon. Member for Woodford was a contemporary--none other than Mahatma Gandhi. We were told by the hon. Member for Kensington (Mr. Fishburn)--who is now in his place--that the Mahatma, were he alive, would be a supporter of water privatisation. The hon. Member for Kensington has got his gurus somewhat mixed up. The only guru of water privatisation is Professor Milton Friedman. Privatisation is a product of his philosophy and the idea that Gandhi can be prayed in aid as a supporter of this squalid little measure is complete nonsense. The point of the march to the shores that the Mahatma led was to say that salt belonged to the people. He said that salt should not be usurped by the state through the imposition of taxation.

In opposing the Bill, root and branch, we say that water belongs to the people and should not be given away by the state for the benefit of private enterprise. We say that it belongs to the people and that the true purpose of the Bill is not the greening of England. There is nothing more ludicrous than the suggestion by the Secretary of State in the leaks and press conferences before the presentation of the Bill that it was all about protecting the environment. We were told that this is a green measure. The British people may be getting increasingly greener, but we are not so green round the gills as to believe one word of the Secretary of State's ex post facto justification for the Bill.

The true purpose of the Bill came out clearly in the speech of the hon. Member for Cambridgeshire, South-West (Sir A. Grant). He had had enough of all this talk about the environment and he reminded everyone that the bottom line was efficiency and profits. We are glad to hear about efficiency, but it is strange to hear the hon. Gentleman talk in glowing terms about the Anglian water authority being a model for private enterprise and attractive to the French, when 35 per cent. of the Anglian authority's consented sewage treatment plants are in breach of their discharge consents. But, above all, the purpose is profit. The interests of the environment and of the consumer will be subjugated to the overwhelming interests of profit. That is the bottom line.

The select Committee on the Environment has been prayed in aid by people who should know better--I do not include the Secretary of State in that category. In my early days as a member of that Committee, we visited a toxic

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waste dump in the north country. A man who had been in the business for a long time put his hand on my shoulder and said, "You know, son, where there's muck there's brass." On this Bill, Conservative Members believe, "where there's water, there's dosh". The French would call it "leauds and leauds" of dosh. We must put aside this pretence about care for the environment because it does not feature on the Government's agenda.

I am glad that the Minister for Water and Planning is in his place because I have several questions to ask him about the role and resources of the National Rivers Authority. An alarming fact that came out from the press conferences, leaks and subsequent statements was that the NRA will be subject to a Treasury regime in terms of staffing and resources. It will also be subject to Department of the Environment guidance in terms of staffing.

We all know the Department's record in respect of those responsible for monitoring, controlling and trying to abate pollution. During the past four months, two Department inspectors have disappeared from the scene because they were so disgruntled and dissatisfied with the state of staffing and the priority given to adequate resources for the control of pollution. We are supposed to trust our rivers and our patrimony to the tender mercies of the Department of the Environment. We cannot do so. The record of the past nine years is that Conservatives are not up to the job of giving water pollution the priority it deserves.

As to what is expected of the NRA, it is not only Greenpeace--which has wrongly been subjected to some calumny in this debate--that is concerned about the environment. It is not often that one feels compelled to call on the advice of the Country Landowners Association. Unlike the hon. Member for Norfolk, North West (Mr. Bellingham), I do not wake up in the night in a cold sweat over the interests of country landowners--perhaps I ought to. However, I am interested that the association expresses concern about the NRA's financing :

"The Country Landowners Association is therefore strongly opposed to the provisions of the Bill which would make the NRA dependent upon Exchequer grant aid to carry out its function and which would prevent it from borrowing to finance capital works."

That is interesting, and when the Minister responds, I hope he will answer the associations's concerns. If he is not so concerned about the views of Greenpeace or of other groups well known for their work in protecting the environment, perhaps he will answer the concern expressed by the Country Landowners Association, and that of the hon. Member for Norfolk, North- West, which I share, in relation to what will happen to our coastal defences. We do not want to see the hon. Gentleman's constituency disappear under six inches of water--at least, not in the course of this Parliament.

We must consider also the concerns of the consumers. We have been told that this measure will benefit the consumer. To give Jack his jacket, the Secretary of State has always made it crystal clear that the consumer will have to pay for protecting the environment. There is never any question of the polluter or of those who have profited from the creation of waste having to pay. Let us take it as read that the consumer will pay, because that is entirely

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consistent with the political philosophy of Conservative Members. Let us instead ask what protection the consumer will have under the new regime.

The House has been told, and is entitled to clarification of this point, that there will be two parallel and separate committees charged with responsibility for protecting the consumer interests. They are the rivers advisory committee and the customer services committee. May the House be given the assurance that has also been sought by the Consumers Association and by other consumer protection bodies, that both committees will be properly resourced and funded ; above all, that they will be given the requisite power for dealing with the problems that the industry has faced in ensuring that those responsible for pollution are brought to book?

In conclusion, I ask for one further point of clarification. The Secretary of State will understand the confusion that exists in the minds of observers of the environmental scene. At one moment, the Secretary of State makes it clear that it is no part of a water authority's responsibility to impose a level of fine or to prosecute large numbers of defaulters, arguing that in such a situation, money that could be spent on improvements would be spent on implementing fines.

On the other hand, the acceptable face of the Department of the Environment, in the form of the Secretary of State's junior Minister, tells us that it is important that there be a greater readiness to prosecute and to make more effective use of powers that already exist. Which is the true voice of the Department of the Environment? Let us hear it tonight and let it stop speaking--as we have heard it, and many Conservative Members speak tonight, and as various Ministers have over the past few months--with a forked tongue.

9.24 pm

Mr. Edward Leigh (Gainsborough and Horncastle) : I am grateful to the hon. Member for Brent, South (Mr. Boateng) for allowing me five minutes at the end of the debate in which to say few words. I want to say a little about the presentation of the Bill. We must be honest--even among those who are not motivated by party spite there is some concern about the provisions of the Bill. There is bound to be concern about any new aspect of legislation and it has been expressed about many privatisation measures that we have introduced. There is no doubt that, as usual, the Opposition have not attempted to use reasoned argument but have resorted to scaremongering, as my hon. Friend the Member for Pembroke (Mr. Bennett) said.

I shall return to first principles, as I did to an audience of about 100 people in my constituency last Friday. If one looks at the present situation and what can be done about it and clears one's mind of all the alternatives, one ends up with something remarkably similar to what my right hon. Friend the Secretary of State has suggested.

The first thing one asks when one talks to ordinary people is, "Are you satisfied with the present water industry?" Of course, the answer is no. Earlier in the debate we heard that the Labour Government cut spending in the water industry by a third. They would have liked to spend more and, if they returned to power and renationalised the industry, they would not want to cut capital spending.

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Government language, however, is the language of priorities. It is about roads versus pensions. There are no votes in sewerage and water when compared with roads, pensions and social security. That has been the problem underlying public dissatisfaction with the water industry. We cannot deny that. Despite the fact that we have increased capital spending by half, we are still not spending enough. A village in my constituency, Claxby, has been denied an adequate sewerage scheme for 20 years. I have a sheaf of correspondence about that on my desk. My predecessor tried to deal with it and I have tried, but the buck has been passed from the local authority to the water authority and nothing has been done. The present facilities are inadequate.

If we ask ourselves what to do about the situation, we might come forward with a simple solution. First, why not set up for the first time in our history an environmental protection agency with real teeth? Why not, for the first time, ensure that the gamekeeper is no longer employed by the poacher? That is what is being done in part III of the Bill and it is something of which we should be proud. That is a matter not of presentation but of fact.

If we were starting from square one and asking what we could do to make privatisation work, the answer might be to create powerful, strong, regionally based water companies free from the day-to-day interference of Ministers, free to invest and attract private capital and to provide villages such as Claxby and others with adequate sewerage systems. That is contained in part I of the Bill. Finally, we might say that overlaying that we should ensure that we have the tightest, strongest and most closely regulated industry in the world, which will ensure that despite the monopoly that water companies must have, they will not abuse the monopoly by overcharging, discriminating against certain customers, reducing services and so on. That is all in part II of the Bill. So even if one were not motivated by dogma, as the Opposition say we are, and if one approached the matter from first principles, one might come to the House with something similar to the Bill.

There are bound to be one or two worries. The National Anglers Council welcomes the Bill but is concerned about representation on the National Rivers Authority. I have no doubt that its concerns will be listened to. There are fears about allowing the water authorities to get on their feet. The golden share has been mentioned and there may be some mileage in that. However, while we ensure that there is a tight regulatory framework, we must remember that water is, and always has been, a business. For all our sakes we have to allow the water companies to invest in the future. They are determined to make privatisation work and I am sure that the Bill provides an excellent way forward. I give it my full support.

9.29 pm

Mr. Allan Roberts (Bootle) : The Select Committee report has been quoted at some length to illustrate that the last Labour Government cut capital expenditure on the water and sewerage industry. We accept that that is the case. However, we claim two things : first, that this Government have continued to reduce capital expenditure ; secondly, the last Labour Government were in power for five years, and since then this Government have been in power 10 years. Nearly every recommendation in the Environment Select Committee's report is an

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indictment of the Government's record over the past 10 years. We quote in aid the Select Committee's report. We recommend that greater scope should be given to water authorities to borrow commercially. In the light of the report--an all-party one--such scope does not depend on the privatisation of the water industry.

The Bill will introduce momentous changes to the management of the water environment. Although the Government have sought to defuse the potential time bomb standing in the way of privatisation, they face major environmental controversies about sewage discharges, the quality of drinking water, and the industry's land assets. It is a 340-page monster, containing 180 clauses and 24 schedules. The Bill must receive Royal Assent next June if the flotation of water authorities, which is currently intended to be at the end of 1989, is not to interfere with the Government's plans for the sale of the electricity industry. The Government want the Bill to be pushed through with unparalleled haste. Opposition Members will not co-operate with their intention.

In recent weeks, Government and water industry sources have insisted that an extremely tough regulatory regime will be ushered in by the Bill. However, the industry and the Government have been anxious to head off extra controls that could prejudice the chances of a successful flotation. If the National Rivers Authority is to be an effective force in improving environmental standards, it must strengthen its technical, monitoring and scientific capabilities. The National Rivers Authority already faces significant extra responsibilities, before it is properly established. I refer to the need to prepare plans to implement the decisions of last year's North sea conference and the 1990 national river quality survey, and extra monitoring of "red list" substances, all of which could rapidly erode the real value of its resources.

The Government are yet to work out how to deal with the major threat--it is a major threat--to their privatisation proposals. Ironically, that threat is entirely home-grown. It is posed by the water authorities' own sewage treatment works. The recent public debate about such facilities involved the failure of more than 850 works--or over 20 per cent. of those with numerical discharge consents--to comply with their consent conditions.

Illegality--and it is illegality--on that scale is a significant obstacle to flotation. Lawyers have already advised senior executives in the water industry that they must not sign prospectuses if their businesses are knowingly committing criminal offences. To date, the Government have responded in two ways. First--the Opposition welcome it--they have provided extra funds for capital investments which, according to different ministerial statements, are intended to ensure that all, or almost all, non -complying works operate within the law by October 1992. Opposition Members doubt that that can be achieved with the amount of extra capital that the Government have allocated. They have also said--we regret it--that non- complying works may be given interim relaxed consents to facilitate privatisation, provided that credible improvement programmes are in hand. In preparation for privatisation, more, not less, damage will be done to the environment, which gives the lie to the Government's claim.

Organisations such as Friends of the Earth and Greenpeace are prepared to apply to the High Court to test any dubious Government decisions. Anything but a small-scale relaxation exercise would certainly drive a

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