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Water Privatisation (Merger Policy)

3.30 pm

The Secretary of State for the Environment (Mr. Nicholas Ridley) : With permission, Mr. Speaker, I should like to make a statement on the merger policy in relation to water privatisation.

On Second Reading of the Water Bill, I announced that, in conjunction with my right hon. Friend the Secretary of State for Trade and Industry, I would be bringing forward proposals to ensure that there are arrangements to preserve comparative competition in the water industry following privatisation. I am now able to give the House full details, part of which it was necessary for me to announce at the opening of the stock market at 9 o'clock this morning because it affects stock market dealings.

The proposals will ensure merger control provisions which will allow competition through takeover for the management of water companies, while guarding against undue concentration and reduction in the number of independently owned companies. In order to protect the basis of comparative competition and assist effective regulation of the water industry, there will be special provisions applying to any water company takeovers which would have the effect of bringing any company holding an appointment under the Water Bill, whose asset value exceeds £30 million, under common control with any other such water company. Common control for the purposes of these provisions would be as defined in section 65 of the Fair Trading Act 1973. The provisions will apply to statutory water companies as well as the new water services plcs.

The proposed amendments to the Water Bill will require the Monopolies and Mergers Commission to take into account, in considering any bids for water companies, the undesirability of mergers which would reduce the comparative information that the regulator will need if he is to make yardstick competition effective. The Director General of Water Services will advise the Director General of Fair Trading when water bids are under consideration. The Bill would enable the MMC to make an adverse report on a merger and the Secretary of State for Trade and Industry to take action to prevent or reverse it solely on the ground that a successful bid would reduce the number of water companies in independent ownership, although the MMC would not be required to reach such a recommendation if it considered that there were other public interest reasons which, in a particular case, outweighed the loss of comparative competition.

The Government intend to introduce amendments that will allow takeovers of statutory water companies initiated from today to be considered against the amended criteria following the coming into force of the new legislation. The amendments will provide that the Secretary of State for Trade and Industry can refer to the Monopolies and Mergers Commission, within six months after the Bill comes into force, any water merger covered by the new provisions which is initiated after 9 am today.

In addition to the proposals I announced this morning, I am now in a position to tell the House our proposals on special shares. The need for comparative competition implies that, in order to stimulate efficient and effective management, the market must have the opportunity to bid for these

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companies, especially where performance is inadequate, subject to the restrictions I have announced to prevent undue concentration. But we have decided, in the case of the water authorities, given the difficulties of transition from nationalised industry to private sector company, to protect their successor companies for a limited period by providing for a time-limited special share.

Any takeover within a five-year period will require both the approval of shareholders to a change in the relevant articles of association of the company and the written consent of the special shareholder who will be the relevant territorial Secretary of State. Thereafter, the decision would be solely for shareholders, subject to the merger control provisions I have announced.

Dr. John Cunningham (Copeland) : Why has the Secretary of State waited so long to take this action to prevent the concentration of private monopoly control of the nation's water resources in fewer hands, when it was obvious from the outset that that was exactly where his proposals would lead?

Why are the Government now running away from market forces? At least 15 statutory water companies are now either in French control or the subject of very large French shareholdings. Is it not true that, if the Secretary of State had acted earlier, the Newcastle and Gateshead water company and the Sunderland and South Shields water company purchasers would at least have been referable to the Monopolies and Mergers Commission? He has waited until that is too late to make his announcement.

Have not Government disarray and the right hon. Gentleman's vacillation resulted in three French water conglomerates accumulating a huge stake and influence in statutory water companies, thus again concentrating private monopoly power? Does not even this pathetically belated action leave the majority of those statutory water companies which he says he wants to protect--those with assets of less than £30 million--at the mercy of further predatory takeovers and mergers? Where does that leave the right hon. Gentleman's promise to the House on Second Reading on 7 December when he said :

"It is vital that people should feel that they have a local water company, with those running it living and working locally."--[ Official Report, 7 December 1988 ; Vol. 143, c. 338.]

What does that mean now to people whose local water companies are in the hands of the French?

Why does the Secretary of State waste words and our time on meaningless phrases on the pretence of comparative competition? There is no competition and there will be none as a result of his policies. What is it that requires protection for five years by taking a special share, other than the need to cosset private enterprise monopoly? That is the objective and that is the result of taking a special share in private water monopolies : cosseting the private sector and protecting private monopoly is what the statement is all about.

Have the proposals been agreed and accepted by the European Community? What discussions has the right hon, Gentleman had with the Commission about them? Will he explain to the House what he means by "other public interest reasons" preventing the need for the Monopolies and Mergers Commission to investigate takeovers? This pathetic statement offers no guarantees of independence to statutory water companies. It is a belated

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piece of Tory party political window dressing that offers no protection, choice or competition to water consumers either.

Mr. Ridley : The hon. Member for Copeland (Dr. Cunningham) is making rather a meal of this. He asked why it had taken so long to bring these proposals forward. It may have escaped his notice that they involve legislation. I believe it only right that we should have waited until the Bill was before the House-- [Interruption.] The moment the Bill was debated on Second Reading I warned the House and the country that proposals of this sort were on the way, and the hon. Gentleman quoted from a part of my speech near to the point at which I made that statement.

As I am proposing legislation to amend the Bill, it seemed right that on the first day back after the recess-- [Hon. Members :-- "First day?"]--or second day back, I should put the policy straight away to the House. [Interruption.] The House met yesterday for the first time after the recess. This is the second day back.

The hon. Member for Copeland alleges that there has been a massive concentration in the meanwhile. That is not the case. There are 20 water authorities and water companies with assets worth more than £30 million and, as at the moment when I came into the Chamber, there were still 20 in independent ownership. I am aware that there may be a takeover of Newcastle and Gateshead and Sunderland and South Shields, which would of course reduce the number of comparators, but that has not yet been confirmed.

That was referred to the Director General of Fair Trading, as the hon. Gentleman presumably knows, and my noble Friend announced this morning that that bid would not be considered by the MMC for reasons which I am sure he would be prepared to explain to the hon. Member for Copeland, being reasons which reinforce the need for the statement that I have made today. So no concentration of power of the sort which this statement seeks to restrict has taken place. This will ensure that those who manage water companies and indeed those--the vast majority of them--who own water companies will indeed be living and working locally. That is exactly what this statement will achieve.

The hon. Member for Copeland did not seem to know what comparative competition meant.

Dr. Cunningham : It is fatuous.

Mr. Ridley : Let me tell the hon. Gentleman what it means. I am always having to explain things to him, and I am delighted to do so again.

Dr. Cunningham : It is meaningless.

Mr. Ridley : If the hon. Gentleman will stop making sedentary interventions-- [Interruption.] --and if his hon. Friends seated below the Gangway will stop interrupting, I will explain. Shareholders, investors, auditors, the Director General of Water Services, who is awarding cost limits, and customers of all sorts will have information before them as to the relative cost at which water is sold in each area where an independent operator is preserved. They will be able to compare those statistics and see if one operator is not doing as well as others.

That is what comparative competition means. I am delighted to have this opportunity to explain to the hon.

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Member for Copeland, who has a lot to learn, what it means, and I am prepared to spend as long as he likes teaching him.

The hon. Gentleman did not seem to believe that there should be any special shares for the water industry. I believe it to be correct that nationalised industries which are coming out of the public sector need time to get themselves into an efficient, well-organised state so that they can face the rigours of the market and the threat of takeover, and the five-year fledgling company--as it is called--special share will be to the assistance of the industry as a whole.

These proposals will, of course, have to be discussed with the EEC, but we could not do that in advance, until we had made the proposals, and I have high hopes that they will be acceptable to the Community. Finally, the hon. Gentleman asked what "other public interest reasons" means. If we rely on the MMC to interpret this policy, there may well be the odd example of the commission believing that a merger should be allowed, but the final decision will rest, as always, with my noble Friend the Secretary of State.

Sir Giles Shaw (Pudsey) : Does my right hon. Friend accept that his announcement about the golden share will be substantially welcomed in the Water Authorities Association? I am grateful for his responding so quickly to the points raised on Second Reading.

With regard to the other element in my right hon. Friend's statement, will he take note that, although this morning's decision by our right hon. and noble Friend was not to intervene in the Newcastle and Gateshead affair, which my right hon. Friend's scheme was perhaps designed to prevent had it occurred 48 hours later what is now to prevent a water authority from seeking to take a share in Newcastle and Gateshead, thus bringing the matter further into play? Does that mean that such a bid or attempted bid would result in a referral which my right hon. Friend cannot make now?

Mr. Ridley : I am grateful to my hon. Friend, who sees the merits of the so-called golden share, which the hon. Member for Copeland (Dr. Cunningham) did not seem to believe was the right way forward. The latest information I have is that the Newcastle and Gateshead and Sunderland and South Shields water companies have not had an agreed deal. I cannot predict what will happen in that particular case. If a water authority seeks to take over a statutory water company, three conditions will apply from now on. The first will be the mergers policy which I have just announced. The second will be the outcome of any judicial proceedings which have not yet been settled as to the vires of the takeover by water authorities. I gather that there is likely to be an appeal against a court judgment ; until the law is clear on that point, it will be relevant. Thirdly, it would not be my intention to increase the external financing limit of any water authority for this purpose. Within these constraints, the water authorities will be their own masters when deciding what they wish to do.

Mr. Richard Livsey (Brecon and Radnor) : When he mentioned a territorial Secretary of State, did the right hon. Gentleman mean that the Secretary of State for Wales would have the power to prevent a takeover of a Welsh water plc? Is it correct that he will have that power for only five years? If so, why not for longer?

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How many water companies does the Secretary of State think will be necessary to maintain his so-called comparative competition? Would it not be better to write into his merger policy a share limitation scheme which included the consumers who were resident in the area of the water plc?

Mr. Ridley : On the first point, it is correct that during the five- year period of the special share my right hon. Friend the Secretary of State for Wales will have the power to block or accept a takeover. He will be making a further announcement about arrangements in Wales later this afternoon.

On the hon. Gentleman's other point, I believe that the takeover of an inefficient water authority or company could be very much to the benefit of the consumers if that authority or company is not performing properly. I would not want to discourage that in any way once the companies had found their feet in the private sector. That is why the special share comes to an end.

Mr. Teddy Taylor (Southend, East) : My right hon. Friend honestly said that these proposals had not been discussed or approved by the EEC Commission, but has he at least discussed with it the implications for its new proposals on monopolies and mergers? In particular, can he say whether any specific direction that he proposes to give under these powers could be overturned by the commissioner at the European Commission in Brussels? Does he agree that any proposals that he puts forward to preserve what he rightly regards as comparative competition could be wholly undermined and overturned by Brussels? Therefore, what is the point of this so-called protection, which I accept he is bringing forward for the best possible reasons?

Mr. Ridley : On the first point, this was a market-sensitive announcement which clearly had to be made public before consultation could take place with anyone. I am confident that the Commission will accept our proposals. That is a matter to be determined in future. Clauses will be coming forward for the Bill and the matter can be debated in Committee and in due course on Report in the House. Once these proposals have been accepted by the EEC and by the House, I do not see any way in which they can be overturned later by the Community.

Mr. Jim Cousins (Newcastle upon Tyne, Central) : Does the Secretary of State accept that a combination of this morning's statement by Lord Young and the Secretary of State's statement this afternoon has reduced the provision of water services in the north-east to a complete shambles in which there will be a kind of squires' war between Sir Michael Straker of the water authority and Lord Elliott of Morpeth, chairman of the Newcastle and Gateshead water company? They will be fighting a kind of feudal war at the expense of the water consumers in the north-east.

What advice can the Secretary of State give water consumers in the north- east who are faced with this uncertainty about the provision and ownership of their water services? What are prospective purchasers of Northumbrian Water to make of a situation in which most of the direct water services for which they will be responsible will not only not be in their hands but impossible for them to acquire?

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Mr. Ridley : It is not clear whether the two water companies that the hon. Gentleman mentioned have been taken over by the French company. That had not been decided at the moment when I came into the Chamber, and I cannot predict what will happen. The Newcastle and Gateshead water company and Northumbrian Water have existed in this situation ever since water authorities were set up. I hope that I tread on no one's toes when I say that they have always shown a healthy rivalry, and that perhaps some comparative competition benefits have come out of that. Nothing is changed by this situation. The only diminution in the number of owners would be if these two companies passed into the hands of one French company.

Mr. Alastair Goodlad (Eddisbury) : Will my right hon. Friend confirm that, whereas it is mandatory to refer offers for statutory water companies with gross assets of £30 million or more on an historic cost basis to the Monopolies and Mergers Commission, those statutory water companies, numbering about half, whose assets are valued at less than that can be sold and a reference would not be mandatory? Will he also confirm that the arrangements he has announced are in no way affected by the anti-French sentiment emanating from the Opposition but arise from a desire for competition on a level playing field?

Mr. Ridley : I am not the right person to interpret monopolies and mergers law, but from memory I think--I apologise if I have it wrong--that the referral of a takeover of a water company with an asset value of less than £30 million would depend on whether the combined assets of that company and the company seeking to take it over exceeded £30 million.

Dr. Cunningham : That is wrong.

Mr. Ridley : Perhaps it is wrong. I was trying to help my hon. Friend. If the hon. Member for Copeland (Dr. Cunningham) knows more about it than I do, let him say so. He has not so far shown any prowess in this matter.

I confirm that there is no bias against any nationality in making this announcement ; it applies equally to all nations. It would be quite wrong for me to bring forward any measure that discriminated against a fellow Community country. We are not allowed to do that and want to see an internal market as well as a common market.

Dr. David Owen (Plymouth, Devonport) : The Secretary of State's statement makes him and the whole concept of water privatisation look ridiculous. Is this not a classic French farce in which the Government are locking the bedroom door and inviting Madeleine back in in five years' time? Is not the right hon. Gentleman aware that, if a golden share is necessary now, it should be necessary for ever? Only on those grounds would the European Community countenance this proposal. Otherwise it would be thrown out, and so it should be.

Mr. Ridley : I do not think that there is anything wrong with takeovers. The possibility of takeover is one of the great spurs to greater efficiency in this industry. I am astonished that the right hon. Gentleman believes that the Community would look more kindly upon a permanent special share than upon a temporary special share to protect fledgling industry. He seems to have overlooked the fact that what I announced, which can be paraphrased

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as "one company, one owner" would stop the French coming back to take water authorities. Each of the three big French companies already owns one of the qualifying water companies, which means that they cannot even contemplate bidding for a water authority as well.

Sir Peter Hordern (Horsham) : Will my right hon. Friend tell us why the French should be so interested in our water companies? Do they know something that we do not? Will my right hon. Friend confirm that his objection is to monopoly, whether it be French or British?

Mr. Ridley : The reasons why the French are so interested in our water industry are not for me to go into, but they must feel that they can run the companies very well. That must have been one reason why they showed interest in them.

I should correct what I said earlier ; I apologise to the House. The assets test applies to £30 million gross assets in the takeover target. Reference to the Monopolies and Mergers Commission in such circumstances is discretionary but not mandatory.

Mr. Jeff Rooker (Birmingham, Perry Barr) : Who chose the £30 million figure? Why was the £30 million figure chosen? The Secretary of State has put that figure to the House, but it is not wholly clear whether he chose the figure.

Mr. Ridley : That is the figure in the monopolies legislation above which a reference must be made. That is the reason for choosing the figure. It happens to fit very well with the particular statistics of this industry.

Mr. Ian Gow (Eastbourne) : How many of the 28 statutory water companies are now controlled by shareholders outside the United Kingdom, and how many of them are controlled by any of the 10 water authorities in England and Wales? Is it not surprising that my right hon. Friend's statement, which will limit the monopoly and the potential of monopoly abuse in the water industry, has not been welcomed by the Labour party, which has always claimed to be against monopoly?

Mr. Ridley : The answer to the first question is that at present three water companies are controlled by non-British companies. There are 10 water authorities and they control no water companies. I ceased some time ago to wonder at what the Opposition say.

Mr. Dafydd Wigley (Caernarfon) : The Secretary of State said that the Secretary of State for Wales would make a statement in due course this afternoon. I do not know whether you, Mr. Speaker, are aware that a statement will be made in the House. If not, Welsh Members will be considerably dismayed to learn that a statement will not be made on such an important matter so that we can cross-examine Ministers in the House.

On the general aspects, many people would have welcomed a golden share on the basis that it existed to safeguard the public interest, but the public interest does not run out after five years ; it is a continuing interest interest. What proposals has the Secretary of State, therefore, to maintain the safeguarding of the public interest after five years? Will he consider special shares for consumers in those water authority areas that could collectively provide veto?

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Mr. Ridley : My right hon. Friend the Secretary of State for Wales will not be making a statement. I used the word "announcement". The hon. Gentleman asked about preserving the public interest in this most vital industry of water supply. I gather that he is a member of the Standing Committee on the Water Bill. He will find that the Bill is full of ways to ensure such things as water, sewage and effluent quality and a whole range of other provisions to secure the public interest. That can be done through the legislation, irrespective of ownership.

Sir Anthony Grant (Cambridgeshire, South-West) : As Northumbria has been mentioned earlier in this exchange, may I ask whether my right hon. Friend agrees that there is no better supporter of the consumer--water consumer or otherwise--in the north-east than my noble Friend and former colleague Lord Elliott? Does he further agree that this is a thoroughly sensible amendment to a most important Bill, and that the sooner it is put on the statute book the better?

Mr. Ridley : I join my hon. Friend in paying tribute to Lord Elliott and to Sir Michael Straker, who are both doing an excellent job despite what Opposition Members say. My hon. Friend will not be surprised to hear that I agree that the statement and the Bill are excellent.

Mr. Peter Hardy (Wentworth) : In how many profitable French water companies is there any substantial, significant or controlling British interest? If the answer is none, why is that? Does the Secretary of State believe that water is as essential as oil because in many of the 15 companies to which my hon. Friend the Member for Copeland (Dr. Cunningham) referred the level of foreign ownership certainly exceeds the level at which Kuwait was obliged to dispose of a large proportion of its shares in British Petroleum?

Mr. Ridley : I am not aware of the extent of British participation in the equities of the three French water companies. I gather that there are only three large water companies, but I have no doubt that some British interests own some of the shares, although I do not know how many. The French companies have been so successful and powerful because they have not been run on the local authority or public enterprise models. They have been run on the model of commercial companies which can move around the world and do business around the world as well as in France. We should note the powerful and successful companies which have been created. Perhaps we have something to learn from that. We may learn that it is better to put water in the private sector.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak) : Does my right hon. Friend realise that many of us share his dislike of public monopolies? However, will he explain why private monopolies will be so much better? Private monopolies have a different object from public monopolies. Why will privately owned water be better for those who consume it and have nowhere else to turn for that vital commodity?

Mr. Ridley : My hon. Friend should know that the proposed system of regulation will stop the consumer being exploited by monopolies-- [Interruption.] I hope that my hon. Friend will listen to my answer. If the private company which owns a licence wants to make more

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money, it will have to increase its efficiency and standard of service to consumers. That has been the effect of regulated private monopolies wherever they have been properly regulated. The safeguards in the Water Bill will add to that protection. I should have thought that my hon. Friend would agree that that was the way to get a better service as well as good environmental protection.

Mr. A. J. Beith (Berwick-upon-Tweed) : Is it not ludicrous beyond belief that the proposals designed to prevent monopoly among regionally independently owned water companies will not apply to any of the bids already initiated for the water companies which serve more than one fifth of those who get their water supply from private water companies? In view of today's statement by the Secretary of State for Trade and Industry that the £60 million bids for the Newcastle and Gateshead and Sunderland and South Shields companies--which have a monopoly over most of the north- east--will not go to the Monopolies and Mergers Commission, does not the Secretary of State fear that he has not only locked the door after the horse has bolted, but helped the horse out of the stable as well?

Mr. Ridley : The hon. Gentleman would have been one of the first to criticise the Government if we had proposed retrospective legislation. We are not doing that. The legislation will take effect from this morning, but not before people knew what the legislation would do. The hon. Gentleman must be aware that legislation is necessary. We cannot announce that we are going to legislate unless there is a vehicle in which to legislate. It is not clear whether the water companies have been taken over yet. The hon. Gentleman referred to 25 per cent. of the water industry already subject to takeover from foreign interests. I repeat that, apart from the two companies about which there is uncertainty, only three companies are controlled by French companies at the moment.

Mr. Tim Smith (Beaconsfield) : Is it not complete nonsense to talk about running away from market forces when all the monopolies legislation is designed to counter market forces? Is it not important to achieve the delicate balance between ensuring that water companies remain subject to the healthy threat of takeover and ensuring that there is not such a concentration in the industry that the regulator is unable to do his job because of the lack of comparative information? Is that not what my right hon. Friend's proposals achieve?

Mr. Ridley : I have to admit that my hon. Friend puts it very much better than I did in the statement.

Mr. Dennis Skinner (Bolsover) : Is there not something a little incongruous about a Secretary of State who only a short time ago, when introducing the Water Bill, was in favour of market forces come hell or high water, and who then comes along with a Perrier amendment based on comparative competition? Where did he find that new theory? Will it mean that a consumer in one area who finds that his water is too dear has an opportunity under the system of comparative competition to get on his bike and move elsewhere? If the very basis on which the Water Bill was introduced has fallen foul of the takeover bids, would it not make more sense to chuck the Bill in the Seine?

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Mr. Ridley : The hon. Gentleman would benefit, as always, from reading my speech on Second Reading of the Water Bill. I set out the Government's intention to achieve comparative competition and to prevent concentration in the industry. I said that I would announce the details as soon as possible. That is what I am doing today. The hon. Gentleman will find that, far from wishing to allow market forces, as he calls them, to run riot, as my hon. Friend the Member for Beaconsfield (Mr. Smith) said, in controlling monopolies it is necessary to control market forces. That is the effect of the statement.

Mr. Roger Knapman (Stroud) : Does my right hon. Friend agree that comparative competition will greatly assist the Director General of Water Services when he tries to place a valuation on the companies?

Mr. Ridley : If the director general is to set a price level for each company which is fair to protect consumers and adequate to allow the company to earn a decent return, it is vital that he should be able to see which companies operate cheaper and better than others and the potential for improvement. Comparative competition is a vital tool in his armoury to ensure that the consumer is protected.

Mr. Bob Cryer (Bradford, South) : Is the Secretary of State saying that the final decision on the matter that he has announced today is not in his hands or in those of the elected Government, but in the hands of the European Commission? Will he make it absolutely clear that final power has moved from this House and this Government to the Common Market, of which he is an avid supporter? Does he agree that, as he is apparently trying to grapple with and control market forces which he has supported for so many years, one of the best ways of doing that is through public ownership and democratic control, which he is abandoning through this privatisation measure? Is it not time that he made it clear that he is robbing people of publicly owned water supplies which are bound to be monopolies--he knows that full well--and selling them to the highest bidder?

Mr. Ridley : I assume that the hon. Gentleman does not like the European Community or the Water Bill. However, his prejudices should not be allowed to dominate our proceedings on the Bill. The European Community, as he knows, has an interest in competition throughout the Community. He knows perfectly well that on previous occasions it has been necessary to agree with the Community the arrangements that we make for safeguarding competition in this country. There is nothing new about that. The hon. Gentleman does not like the Bill. No doubt he voted against its Second Reading and found that he was in the minority in the vote. As a good democrat, I am sure that he will accept the majority decision.

Mr. Robert G. Hughes (Harrow, West) : Does my right hon. Friend agree that the reason why some French companies want to buy into our water industry is that they recognise that, with privatisation, there will be greater efficiency and higher standards and that they will make profits from that? Does he further agree that it is only in the early days that our water companies will not be able to protect themselves from unfair competition and that when they feel the benefits from the privatisation of the water industry they will be able to stand on their own feet, and that we will show the French a thing or two?

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Mr. Ridley : That is entirely right, and I wholly agree with my hon. Friend. It will be interesting to see whether water companies purchased by the French perform better than under their predecessors. We shall then have a good test of the comparative ability of the different owners to supply a better service and cheaper water to their customers.

Mrs. Ann Taylor (Dewsbury) : Will the Secretary of State explain the basis of what he described as his "high hopes" that the proposals will be acceptable under EEC law? Can he say when he expects to complete his discussions with the Commission? Will he guarantee that members of the Standing Committee will know whether the proposals are acceptable under EEC law before the relevant clauses are reached in Committee? If not, will he guarantee that consideration of the Bill in Committee will be suspended until it is known whether the proposals will stand?

Mr. Ridley : My right hon. Friend the Secretary of State for Trade and Industry will be taking this matter forward. I cannot say when he hopes to determine the matter with the Community. I hope to publish the draft clauses, which will give the hon. Lady an opportunity to discuss the matter, long before they are reached in Standing Committee. By then it will be easy for the hon. Lady to inquire whether agreement has been reached with Europe. We would not ask the Committee to proceed with a matter that was in doubt. That will not delay the Committee's progress.

European Community

4.11 pm

Mr. Tony Marlow (Northampton, North) : On a point of order, Mr. Speaker. M. Delors, who knows a thing or two about the European Community because he is, I think, President of the Commission, has said that within a

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short time 80 per cent. of the legislation of the European Community countries will be decided in Brussels, within the Community itself. We are aware of what is called the democratic deficit. It is massive and it is growing. Is the House aware, for example, that the European Community is seeking to introduce a draft directive to require everybody in cars to wear seat belts? This is not the sort of thing that we anticipated would come from the Community.

We have one opportunity every few weeks to ask questions about the European Community, and that was today. But there was not a single question on the Order Paper that was asked on the European Community. The first question to be asked on the European Community was No. 24, and of course we did not reach it ; I am not complaining about that. In the past we had a specific slot for European questions. Given the growing impact of European legislation on the House, and given the present massive democratic deficit, I put the plea to you, Mr. Speaker, that you get together with the usual channels with a view to reinstituting the very important facility that the House used to have.

Several Hon. Members rose--

Mr. Speaker : Order. I share the hon. Gentleman's concern, and I am aware that, in the past, 10 minutes were allocated to European questions.

Mr. Dennis Skinner (Bolsover) : Twenty minutes.

Mr. Speaker : Twenty minutes, then.

The best course for the hon. Gentleman and for other right hon. and hon. Members to take, if they feel strongly about this matter, is to question the Leader of the House during business questions tomorrow.

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Orders of the Day

Employment Bill

Order for Second Reading read.

Mr. Speaker : Before I call the Secretary of State for Employment, I must announce to the House that I have selected the reasoned amendment in the name of the right hon. Member for Yeovil (Mr. Ashdown) and his hon. Friends.

4.13 pm

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