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enormous amounts of money have been spent by the European Community and the British Government on cleaning up the Mersey.Mr. Brandon-Bravo : Will the hon. Gentleman give way?
Mr. Hughes : No, I shall not give way.
The practical consequence has been that our objective to convert the Mersey into a grade 2 "fair" river by 1995 has been downgraded because all that we can do now is prevent further deterioration. The Mersey receives more untreated sewage, trade effluent and surface run-off water than any other river. We have committed a crime on much of the water in and around our country. The Mersey is the worst example, but there are others. The ecological capacity of the Mersey and other rivers like it has been exhausted by a sort of environmental grievous bodily harm.
The message of that legacy of pollution is that the precautionary principle of prevention being better than cure is often essential in environmental terms. Unless we prevent water pollution, it is too expensive properly to clear it up.
I have outlined the background to the debate. Water was mostly in the public sector for about 100 years, although many areas had statutory water companies. Some of my predecessors contributed to putting water into the public sector. But we never seemed to have enough money for the water industry. I do not think that Governments would ever have put enough money into it. Other claims on the public purse appeared to have been such that there would never have been enough money for investment.
Perhaps I may be permitted the indulgence--it is a luxury afforded to Liberal Democrats that we can stand aside fairly dispassionately and comment on the record of the other parties--of commenting on the past 15 years. The Labour Government cut pollution expenditure by 50 per cent.. They cut capital expenditure by a third in real terms. The all-party Select Committee on the Environment made it clear that from the mid-1970s to the early 1980s there was a steady drop in investment by the water authorities in sewage treatment and disposal. The Labour Government also failed to implement section 2 of the Control of Pollution Act 1974.
During the first part of the Conservative party's period in office--
Mr. Irvine Patnick (Sheffield, Hallam) : Tell us what the Liberal party would do.
Mr. Hughes : I will tell the hon. Gentleman what we would do. Investment was not significant during the first part of the Conservatives' period in office, although I accept that it then increased. However, it was not nearly as much as it has been since privatisation. The reality borne out by the recent history of investment in the water industry is that it has never been possible for Governments to deliver the investment they needed to deliver when water was in the public sector.
When the proposal to privatise the water industry came before the House I and my hon. Friends, and especially my hon. Friend the Member for Brecon and Radnor (Mr. Livsey) who has the merit of being both a Liberal and a Welshman, argued vehemently against privatisation. We
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opposed it as a matter of principle. As a matter of principle, then and now, we were unhappy with the content of the legislation because we foresaw how it would allow profits to be made and diversification to take place that would be against the interests of the consumer. Yes, it was necessary to find extra money from elsewhere, but no, it was not necessary to set up a structure that would allow very large profits, large and unjustified salaries, which have been evidenced-- unjustifiably high--and sudden increases in cost and expenditure on matters which have little, if anything, to do with the water industry.So what has happened? Even if we had not seen the picture before, we are indebted to The Sunday Times this week for the "Insight" report which gave a summary of the sort of things that have happened. I shall summarise the three main points that the article made : last year the number of sewage pollution incidents did not fall, but increased by 20 per cent ; the newly created water companies underspent on their environmental clean-up programme while they spent twice as much on diversifying into other businesses ; and the National Rivers Authority cannot prosecute in all cases because, provided that the number of certain breaches is small, it is prohibited from prosecuting no matter how serious the breach. We have had a patchy year and a half. We have seen large salary increases. The chairmen of the water companies are paid salaries of the order of £80,000, £100,000 and £120,000. The water companies have made profits of about 14 per cent. Investment has increased--that is good--but prices have increased substantially, in many cases entirely unjustifiably. Across England and Wales the figures that I have--they appear to be accurate show that there was a 67.8 per cent. increase in domestic water bills between 1987-88 and 1991-92. That is 36.8 per cent. above the retail prices index for the same period.
The average water bill is now about £155, but in some places people pay more for their domestic water than for all the local government services put together. In Wales that is certainly the case. I see that the hon. Member for Bridgend (Mr. Griffiths) agrees. I understand that the average poll tax in Wales was £230 before reduction. The water rates figure was higher. A friend who lives in Westminster told me the other day that the water rate for his flat was more than the pre-reduction poll tax. That seems ludicrous. We have paid a lot and some people have gained a lot. Some companies have diversified a lot. At the same time the United Kingdom has sought relaxation of some of the standards set by the European Community. We have sought and obtained 719 relaxations of drinking water quality standards. We know that about a quarter of our bathing beaches do not conform to the European Community standard, and have not won the blue flag award.
We are still failing badly in our sewage sludge and other outfall requirements. We are not yet good environmentalists. Much of our water is still filthy and I am afraid that many of the standards are still low.
As the hon. Member for Pudsey said, we have three tiers of authorities controlling water. The inspectorate deals with drinking water. The National Rivers Authority deals with inland waterways. The Office of Water Services deals with regulation of the finances of the industry.
What should be the way forward? Colleagues rightly ask that question. My view is--
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Mr. Patnick : Tell us about some of the advantages.Mr. Hughes : If the hon. Gentleman will be patient, I shall not take long. I shall give my view clearly. My view is that we should be helpfully guided by the warnings of the Director General of Water Services. He has given several helpful warnings to the industry already during his short time in office. I sought to raise this matter during the Minister's speech, but he did not allow me to intervene. The director general warned today that companies should not seek to charge people for improvements that have not been carried out and are not likely to be carried out. He also warned that there is still a high and unjustifiable number of debt disconnections. He has also warned, as we heard before, that excessive profits appear to be either made or anticipated. Lastly, he has warned that to concentrate on diversification--for example, into hotel purchase, as the Welsh water authority is doing--rather than on clearing up coastal estuaries, such as the one around St. David's which was cited in The Sunday Times , is to have the wrong set of priorities. He warned that customers would rightfully complain.
We believe--I say this provisionally, because our conference will decide the matter in September--that it would be appropriate to return to the mechanism of a statutory water company, which would have a corporate structure but would be regulated much more clearly on behalf of the public. It is, of course, proper and necessary to allow additional investment : I have made that abundantly clear. But the present structure clearly is not tilted sufficiently in the interests of the consumer. It is tilted too much in the interests of those who have ended up being the shareholders, the bulk of whom are not domestic consumers. Most of them are the companies, corporate entities and large commercial organisations, not the woman or man in the street who relies on the water supply day by day.
How should we charge for water? Imposing meters--I appreciate that Labour also objects to the idea--seems to be the wrong way forward. But it is important that people should know how much they use and that there should be disincentives to use. That should be an important conservation principle. But the charge should also take account of ability to pay. A high standing charge for low use unjustifiably penalises those in lower income brackets. We should also make sure that the charge is not related to the old-fashioned and increasingly outdated linkage with the rates, which of course may not be appropriate in the future.
Sir Alan Glyn (Windsor and Maidenhead) : Is the hon. Gentleman's party in favour of water meters, by which the charge would exactly reflect the amount used?
Mr. Hughes : My party will debate this subject in Bournemouth in September, when we shall take a decision on this and other linked issues. My personal view is that water meters are a good idea, provided that the cost of installation is not borne by the consumer. They should be provided by the water company. Otherwise customers like the pensioner with a low income would have to pay.
Nor should there be a standing charge. One should pay for what one uses, meaning that the low user pays a small sum. That would create an incentive to minimise rather than maximise usage. My party may disagree with me in
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September and we may decide that water meters are entirely unacceptable. Perhaps we shall want a water income tax or some other method.The lesson of the last couple of years has been that investment has been the number one priority of the water industry. Now, its priorities should be to look after the needs of the consumer. The dogma that said "We must privatise because that is the remedy for all evils" has proved to be inadequate, as is always the case. But to pretend that the public purse, without any other money, will always be able to invest, for example, in a ring main for London, in the improvement of our beaches and in clearing up our sewage, is an argument which also does not hold water.
We are dealing with a sensitive and politically controversial issue. It would be better to proceed by seeking agreement than confrontation. We must not continue the present structure by which many people cream off much of the profit. The public are not happy with the existing water system and with the water industry as it is at present organised. The system must be changed, but next time it must be done with public consent.
5.52 pm
Mr. Robert B. Jones (Hertfordshire, West) : I was surprised to discover as I listened to the speech of the hon. Member for Southwark and Bermondsey (Mr. Hughes) that there was much common ground between us on this issue. That was particularly the case when he began by referring to the conflicting claims that are made on the water industry today compared with the demands of the past. Having served for seven or eight years on the Select Committee on the Environment, I assure the hon. Gentleman that we have examined in depth the issues involved in the water industry. We look into its problems at regular intervals and we accept that the industry's problems deserve serious treatment.
I welcomed the hon. Gentleman's speech because it was the first on the Opposition Benches which even began to air some of the issues that must be addressed, rather than simply ducking issues. Indeed, I thought that Labour Members had a brass neck to select this subject for debate. As the hon. Member for Southwark and Bermondsey said, their record in office was absolutely deplorable. Not only did Labour Members cut investment significantly then, but they are now proposing to renationalise the water industry, and the hon. Member for Dewsbury (Mrs. Taylor), who speaks on water issues for the Labour party, did not have the decency earlier to give me a straight answer to my question about how that would be funded. We must know how Labour Members would fund investment in the water industry if they would also take a tough line on prices.
It is obvious that Labour gives the water industry a low priority in its plans. That reflects what happened when Labour was last in office. In that connection, it is deplorable that Labour Members should go in for so much bashing of Britain in terms of water when we have so much of which to be proud. About 95 per cent. of our rivers meet the fair or good standard which is laid down, which is more than can be said of many other European countries. About 96 per cent. of our homes are on main sewerage.
That contrasts with the record of many of our European partners, who are ready to lecture us but who do not do much about their problems. In Italy, for example,
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the city of Milan discharges all its sewage untreated into the river Po and out into the sea, yet no action is being taken by the European Community on that, I suspect because the EC commissioner for the environment is an Italian. Such a deplorable record leads one to be extremely suspicious of European claims.If the lessons of the past are the consequences of under-investment, it was clearly not under-investment by chance. Water and sewerage came low down the political pecking order in those days. One can understand why Governments were tempted, when considering their capital programmes each year, to ask which were the most important areas--health, education, defence and so on--with the result that the water industry came low down on the list. That was true of Labour and Conservative Governments. As has been pointed out, there were not in those days many votes in water and sewerage. I suspect that that is changing.
Much has been said about pollution. Only now, with the existence of the National Rivers Authority--the roles of poacher and gamekeeper having been separated--do people seriously think it worth reporting incidents of pollution. I come into that category because, as a constituency MP, I used to think it frustrating to take up a pollution incident concerning, say, the river Gade, and write to the Thames water authority about it, only to discover that the pollution was coming from that authority's own sewage pumping station. The authority was supposed to be responsible for checking the level of pollution in the water and, if necessary, remedying the situation. I welcome the fact that a major part of the Water Act 1989 involved the creation of the NRA and the separation of the two roles of poacher and gamekeeper. Indeed, I would go further. I have always made it clear that I see that move as a stage towards the creation of an environmental protection agency. I hope that the Minister will consider, in that context, the merging of the drinking water inspectorate into the NRA and eventually into an environmental protection agency.
The NRA is doing an excellent job but, especially as we consider the problems ahead, its role seems too complicated. It is having to deal not only with questions of pollution but with matters concerning leisure and the environment. Rationalisation could take place between the NRA and the British Waterways Board so that, for example, all the leisure functions were enjoyed by the same body. I accept that in its first year or two the NRA should not have a shake-up of functions, but in the long term we should proceed in the way I have described and attain a specialist approach to the various topics.
Much has been made of The Sunday Times article. I read in it the need for more powers to be given to the NRA, and the Minister has responded positively to the issue. If the NRA feels that way, it should say that to hon. Members who are interested in the subject and suggest where it thinks its powers are failing and should be extended. I for one would be sympathetic to a re-examination of its powers, if I thought that necessary.
As to underspending, when one considers the huge size of the capital programme, it is hardly surprising that there should be slippage. Anyone who has had to deal with this country's planning system knows how difficult it is to get
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projects on stream, on time. I refer not just to obtaining planning permission, but to all the consultations that are involved. During the Select Committee's consideration of the bathing waters directive, it had an opportunity to examine in detail why there was no water treatment plant on the Fylde coast. It was clear that the rows between different levels of local authority and the water company all contributed to delaying a project that was extremely important to that area's tourist industry.We must be honest and acknowledge that price and consumer attitudes to the cost of water are problems that we must confront. At least the hon. Member for Southwark and Bermondsey acknowledged those difficulties and suggested how they might be solved. Far too many people think that water is free, conveniently forgetting that it must be collected and transported, that water pipes must be maintained, and that sewage has to be cleansed and disposed of. That is a very expensive exercise. If we and the rest of Europe hold to the polluter pays principle, the polluter in the case of water and sewage is the domestic consumer of clean water and creator of sewage.
The amount that we pay for our water is small in comparison with other day- to-day commodities and utilities, and even in comparison with our expenditure on TV and on booze. It is also small in comparison with other countries. Our charges are half those made in Germany and less than in almost every other European country. Some of the legislation coming out of Brussels also presents a problem. Although much of it is welcome, some of it has no proper scientific basis. A great deal of expenditure is being incurred on schemes that would not be justified if the regulations were properly framed. I will cite one example in respect of sewage. The bathing waters directive provides that a water shall fail if there is any instance of salmonella. One third of all seagulls carry salmonella, so every bathing beach on this country and throughout Europe would fail that directive if proper monitoring were undertaken--and it is not, in many parts of Europe. That is the kind of thing that must be changed if European directives are to be taken seriously. Nitrate levels are another area of concern. The Select Committee remarked that, on the basis of the scientific evidence available to it, existing permissible levels are far too low. If we are to spend large sums of money improving British water standards, there are many more important areas. Heavy metals, for example, present a far more serious problem than nitrates to most people.
The hon. Member for Normanton (Mr. O'Brien) referred to standing charges in his intervention, and I have considerable sympathy with the argument made by him and by the hon. Member for Southwark and Bermondsey. Although it is true that the infrastructure must be in place whether or not one uses water, the same can be said of Marks and Spencer, which incurs overheads regardless of whether one shops at that company's stores. The match between the standing charge and the unit cost is currently out of kilter, and it should be closely examined.
It will be clear from my remarks and from earlier speeches that the majority of the public acknowledge that a huge investment is being made in the water industry. That has only been possible because of privatisation, and it would not have been undertaken if it had been left to the state to find the resources. Because of that, the very least that the House is owed today is a decent, straightforward
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answer from the Opposition--but the House will have been struck by the deafening silence that greeted my questions to the hon. Member for Dewsbury.6.4 pm
Mr. Alan W. Williams (Carmarthen) : We oppose the privatisation of water and the creation of private monopolies, for which there can be no economic justification. I point out to the hon. Member for Hertfordshire, West (Mr. Jones) that we shared the Government's view, in their creation of the National Rivers Authority, that the industry needed a separate organisation. However, we would like an NRA that has much wider powers. We resent the amnesty that the Government granted to the water companies, which allows them to carry on polluting--and when fines are imposed, they are far too low. They need to be 10 times higher to have any deterrent effect.
There has been a historic lack of investment in the water industry, from the 1950s right through to the 1980s. The answer was to devote more public money to cleaning up the environment, not to privatising the industry. There is no evidence yet of any environmental improvement following privatisation. As has been said, over the past year, the number of pollution incidents has increased by 20 per cent. The number in the case of Welsh Water is 717, which is an increase of 25 per cent. There is no evidence either of any improvement in respect of beaches or drinking water quality.
However, there has been a dramatic increase in water charges, and that is brought to our attention almost weekly in our constituencies and through the media. There has been a 30 per cent. increase over the past two years, with Welsh Water showing an increase of 16.4 per cent. last year alone.
With the introduction of the poll tax, many water companies are moving towards something like a water poll tax, which has brought a dramatic increase in standing charges, which now account for 60 per cent. of Welsh Water's income. Its standing charges have increased by between 30 and 60 per cent.--which is most unfair to the poor. A different charging system should be devised. The old system, which was linked to rateable values, was generally accepted as fair--and when we get into government and introduce our fair rates policy, we shall want water companies to follow suit and to levy charges in proportion to property values and to people's ability to pay. Many householders have difficulty paying their water rates. If an individual falls more than two months into arrears, the water companies automatically issue a summons, which incurs legal costs that are often greater than the amount outstanding. I have cases in my own constituency of single-parent families who cannot keep up payments. In one instance, an elderly person who had never been in debt received a summons as a result of an error. When I wrote to Welsh Water, I received a standard reply pointing out that it issued 45,000 summonses last year. Its attitude is nothing short of callous.
What people resent most of all is the enormous profits that the water companies make, and the way that they diversify. Last year, Welsh Water made £128 million on a turnover of just £293 million, so 40 per cent. of its turnover was profit. The salaries of top executives rose by 30 per cent. and Welsh Water has bought 10 per cent. of the
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shares in South Wales Electricity, which is simply a speculative venture. It is now buying five hotels in Wales, including the largest hotel in Carmarthen, at a cost of £10 million.The public feel that the water companies are misusing the freedom that they have been given by the Government. The regulator is weak and should examine what is happening in terms of diversification. In turn, the Select Committee should investigate the water companies' profits and see whether they are being used for environmental improvements. If they were, people might be willing to pay the extra water charges, but they are being misused. With the water industry in private hands, such dangers will always exist. The only answer in the long term is to return the industry to public control and public accountability.
6.11 pm
Mr. Richard Alexander (Newark) : I should be interested to know whether returning the industry to public control, as suggested by the hon. Member for Carmarthen (Mr. Williams), is Labour party policy. The history of the Labour party's opposition to privatisation has always been scaremongering and exaggerating the awfulness of what will happen, leaving those who are less able to accept problems unable to see what will happen. Nevertheless, people have learnt that water privatisation is not as the Labour party described it in previous debates. The Labour party did the same in debates on the national health service and British Telecom and is now attempting to blackguard the water authorities. The tragedy is that Labour Members are still attempting to rubbish the water authorities and what they are trying to do, despite the fact that privatisation continues. They no longer come out with the same old exaggerations, saying that footpaths will be closed and areas of outstanding beauty will become yuppie villages or ghettos, but the distortions remain and we have heard some of them today.
Our ideological opponents miss the point. Privatised water authorities are in place to produce water that is as clean as possible, combined with the increasing number of duties imposed on them by Europe to make water acceptable and drinkable. Although returns to shareholders are important, they are not the main object of the exercise. Indeed, because of statutory intervention, they cannot be the most important aspect. In any event, I doubt whether any hon. Member would not rather have our clean water than that of any other European country that preaches at us about improving water standards. One of the many great pleasures in life is to come back from two weeks in, say, Spain and to be able to turn on the tap and find clean, cool, natural drinking water. I wonder whether one can do that in any other country in the world with the same absolute certainty that the water will be pleasant to drink.
This country sometimes does itself a disservice in debates such as this when Opposition Members claim that the current position is unacceptable. Instead of proclaiming the nastiness of our water, we should proclaim its virtues. Instead of complaining that too much profit is being made, we should explain that the investment in the industry is for even greater water quality. We should be able to tell the nation and the world that we bear comparison with any other water-producing country.
Reference has been made to the report of the Select Committee on the Environment. I served on that
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Committee and helped to produce that report. I remember being briefed by the water authorities, which were tearing their hair out over the inability to invest as they thought best to improve water quality in their areas. I remember their frustration in dealing with Treasury requirements to produce certain returns on their capital, even though they were being starved of capital under a Labour Government and, indeed, under a Conservative Government until privatisation. It was an unsatisfactory time for them all. Public ownership meant that management was limited to damage limitation and political pressure.Today, water managers are motivated by responsibility to their shareholders and the public at large and by leadership in their industry. Above all, they are now impelled by accountability. They are no longer restricted by Treasury economics, damage limitation and hostility to initiatives.
It is fashionable for the Opposition to campaign on the basis that everything is awful and that they could do much better. However, they are the Government-in-waiting and believe that they will win the next general election. If they are to convince the electorate that they are not just political opportunists, desperate to take office at any cost, they must come clean with the electorate and the House and answer the questions put to them, not least by my hon. Friend the Member for Hertfordshire, West (Mr. Jones). How do they propose to carry out their promises? Will it be through increased charges and taxation or, as the hon. Member for Carmarthen said, will it be by renationalising the water authorities? Labour Members have said nothing precise in this debate. We have had a long tirade of carping, but nothing positive. At this stage, shortly after privatisation, we should leave the water industry alone and let the professionals manage it. They are doing a good job as a result of privatisation and Labour's vindictiveness against the private sector cannot deny that. 6.17 pm
Mr. Peter L. Pike (Burnley) : The debate focuses attention on a problem which lies at the root of privatisation of this essential, basic industry, which is so crucial to our industrial and commercial life. The clash will become increasingly evident as a result of privatisation, due to the need to make profits for shareholders and at the same time to serve the interests of the nation and consumers. The legislation clearly provided for charges to increase by inflation plus a K factor. That was different from all the other privatisations, which provided for charges increasing by inflation minus certain amounts. Therefore, we know that prices will continue to rise by more than inflation.
We must be extremely cautious when considering the installation of meters. I know that the industry is consulting on that matter. One must treat even that consultation with caution, not because I accuse the industry of doing it falsely but because few people will fully understand the implications of metering. One must accept that, however the charge for the capital cost of installing meters is met, it will ultimately affect the charge to be met by the industry. The reading of the meters will also add a revenue charge.
Unlike electricity and gas, the commodity that goes through the system is not the expensive part. Rather, the
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distribution and treatment--before and after --in the sewage treatment works form the major cost. Therefore, the relative amount that the consumer uses is less influential than in some other industries. We must also recognise that metering may penalise families with young children who use a lot of water for washing clothes. The same applies to people with manual jobs--who will need to do a lot of washing and will need more baths than other workers--and to the elderly, the sick and the disabled.Much has been said about investment. The Parliamentary Under-Secretary of State described the mid-1970s as the peak period for investment. The issue has been debated for years in the Select Committee and elsewhere, and I have never denied that the decline in investment began under Labour--but it continued and accelerated under a Conservative Government. What the Conservatives fail to point out is that--despite their having been in office for 10 years at the time of privatisation, and despite all the economic miracles for which they claim credit--they have never regained the level of investment that existed in the mid-1970s.
The hon. Member for Hertfordshire, West (Mr. Jones) shakes his head, but he was a member of the Select Committee when I was, and the graph shows clearly that I am right. The key issue was never the ownership of the industry--investment was always the problem. We could have solved that problem if the Government had chosen to remove the industry from such restraints as the public sector borrowing requirement and the external financing limit. We want to achieve the best possible drinking water standards. We also want to avoid the cheapest ways of dealing with sewage, which in the long run will lead to higher costs as they become subject to more and more limitations. That will make it more difficult for us to clear up our beaches. A secret memorandum from North West Water, dated 30 May, has been--appropriately enough--leaked. It states :
"Following the latest cut in major capital refurbishment expenditure, I have contacted your works managers and asked them to revise their programmes for the year".
That shows that the industry is already experiencing difficulties in dealing with investment problems and tackling the tasks imposed on it, while at the same time meeting the limits on charge increases forced on it by current legislation and making a profit for the shareholders. We believe that privatisation is failing to satisfy the requirements of the public.
6.22 pm
Mr. Martin M. Brandon-Bravo (Nottingham, South) : I think that the whole House will agree with my hon. Friend the Member for Hornchurch (Mr. Squire), who said that no one wanted water to be rationed as a result of price considerations. We all agree that water bills must take into account the impact on, in particular, pensioners and families with low incomes. It does not follow from that, however, that we should emulate the Labour party and criticise the conduct of the water companies. Where does Labour imagine that the money for investment will come from? That question has never been answered. In an intervention in the speech of the hon. Member for Dewsbury (Mrs. Taylor), I mentioned the pre-tax profits of the water body in my area. It is extraordinary for any company--I refer here to Severn Trent--to plan to spend twice its current profits on investment. I understand that
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Severn Trent is not only spending £400 million on investment this year, but planning to invest some £4 billion. That would never have happened in the public sector ; it is time that we faced up to that. The hon. Member for Dewsbury avoided my question and promptly suggested that the company was investing outside the water industry. That is perfectly true--it has just bought BIFFA, a major waste disposal company. And why not? The water companies are very much involved in the waste disposal business, and I think that BIFFA fits Severn Trent's plans very well. What the hon. Lady does not want to admit--I have checked this--is that the money for that investment did not come from funds that should rightly have gone to the industry. The company did not use what we called the "green dowry" at the time of denationalisation. It raised the money by using its normal banking facilities and through the issue of bonds. It is diversifying without using funds which ought to be invested in the industry as a whole. We shall have to check with Hansard tomorrow, but I have the impression--from either her tone or her words that the hon. Member for Dewsbury believed that the NRA was somehow or other no longer in the public sector. Surely the hon. Lady will be the first to admit that it has remained in the public sector. I hope that my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) will not think that I am treating him poorly when I suggest that history will probably record that he made the most important decision of his political career when he decided that the denationalisation of the water industry should involve the separation of the commercial side--now in the private sector--from the environmental side. He rightly believed that that element, along with the NRA, should stay in the public sector, which is what has happened. As has already been said, we have separated the gamekeeper from the poacher.If there was a mistake in our denationalisation legislation I hate the word "privatisation"--
Mrs. Ann Taylor : The industry was not nationalised.
Mr. Brandon-Bravo : There they go again--they love it.
I was going to say that I felt uncomfortable about one aspect of our legislation--the size of domestic bills for highway drainage. I appreciate that the cost of highway drainage had to be paid by someone and it was left to the plcs to include it in their charges. Surely, however, it should be paid either through central taxation or through funding for the local authorities or the Department of Transport. I may be guessing, but I suspect that bills in the Severn Trent area would be 8 to 10 per cent. lower if highway drainage costs were not charged to individual households.
6.28 pm
Mr. William O'Brien (Normanton) : The title that Labour has selected for today's debate--"Priorities of the Water Industry"--shows how badly such a debate is needed.
The Yorkshire water authority introduced compulsory water metering in part of my constituency. No joy is involved in compelling people to install water meters. The authority promised that those who used a lot of water because of medical conditions--those who suffered from incontinence or had to use dialysis machines, for instance--would be given special consideration. It reneged on that
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promise : such people will have to pay like everyone else. That is just one of the injustices that water metering has brought about. What happens if the water supply is interrupted or if the mains are flushed and some dirty water flows through the system? We questioned Yorkshire Water about how that will be judged and it said that it is subject to negotiation. Imagine what will happen to people who cannot negotiate with professionals when they try to obtain a reduction in their water charges because of dirty water in the system. What will happen to people who doubt the meter because, for example, they can see it turning when the system and the taps are turned off? If they question the water authority, it will say "We will check the meter, but if it is correct you will have to pay between £20 and £40." Such people will say, "I cannot afford to have it checked." That is what is facing people who are being compelled to have water meters.I object not to people having water meters--if someone wants a meter, let him have it--but to a water authority saying that everyone must have them, without the authority first considering the implications. Conservative Members wanted to know what the Labour party's policy is. We oppose compulsory water metering, which is one of the issues on which we shall fight the next election. Conservative Members can be assured that I shall campaign vigorously on the issue because of my constituency experience.
6.31 pm
Mr. Win Griffiths (Bridgend) : It has been an instructive debate. I was not surprised that Conservative Members tended either to ignore the past 10 years or to try to rewrite its history. On the fundamental issue of who spent what on water, the record is plain : the average for the Labour years was £1,254 million but for the Tory years up to privatisation it was £922 million. The graph went down between 1974 and 1979 and continued to go down until 1986, when it began to increase but still did not reach the spending of the previous Labour Government. Those straightforward facts are obtained not from us but from an independent source. [ Hon. Members :-- "Who?"] The Library produced the figures ; Conservative Members can obtain them from there.
Much has been said about the investment programmes of the water companies, but most of that investment was made in response to European Community directives, which for a decade the Government tried to avoid complying with. They complied only when they were threatened with proceedings in the European Court of Justice. There is slippage in the programmes on water and sewage treatment and 48 per cent. slippage this year in complying with European Community sewage treatment directives. Although they predict a better performance, how can we hope that they will meet their targets when they have begun so badly?
Mr. Roger Gale (Thanet, North) : I am interested in what the hon. Gentleman is saying, but I wish that he would stop running down the United Kingdom compared with Europe. Since denationalisation, Southern Water has spent millions of pounds in my constituency on new sewage systems and on bringing bathing and drinking
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water up to standard, whereas Brussels, the heart of the European Community, still pours raw sewage into its rivers.Mr. Griffiths : It seems that the hon. Gentleman would like to take charge of Europe, but I have no desire to do so. I have not compared our rates of compliance with another European country. I am considering only the state of play in Britain, which is not good enough given the incredible amounts of money that consumers are having to pay and the profits that are being stuffed into the pockets of shareholders, particularly of directors who have preferential share option schemes, from which they make thousands of pounds. That is the issue, not what is happening in Brussels or anywhere else. The hon. Member for Hertfordshire, West (Mr. Jones) attacked the record of the Italians, but the European Commission threatened them with action and as a result the River Po is being cleaned up. The hon. Gentleman's comments were true when the Select Committee considered the matter, but they are not true today.
We have created a financial leviathan with a monopoly that allows water companies to ride roughshod over consumers. Is not it a coincidence that in this time of economic recession the companies that are returning massive profits and are buoyant are the privatised companies, such as British Gas, British Telecom and the water industries, whose captive customers have been left unprotected by the Government?
Privatisation cost British taxpayers £3.3 billion. The Government did not find it difficult to provide money for the water industry, but they did not want to do so. They wanted to privatise it and threw money at it, the purpose of which had nothing to do with improving the lot of the customer or the quality of water. That is why headlines appear in our newspapers saying,
"River devastated by farm pollution",
and
"River poisoned, thousands of fish killed",
and
"Mersey polluters breach limit 859 times in five years", and
"River Bourne restocked after serious pollution"
and
"Swan lakes so polluted that film can be developed from its water".
Such headlines appear every week in our newspapers.
Low fines are levied on polluters. Shell justly suffered a massive fine of £1 million, but there seems to be no consistency in the application of fines.
For six years of the Government's term of office, fewer of our traditional beaches met the EC beach water directive than did those in the land-locked state of Luxembourg. In Luxembourg, 38 beaches had to comply, whereas in Britain the figure was 27. Again, because the European Community threatened to take Britain to the European Court of Justice, the Government finally recognised in 1986 that traditional bathing beaches meant about 400 beaches. The Government claim to have achieved 77 per cent. compliance five years after they should have complied with the directives, which shows the effrontery with which they are prepared to behave towards the British public. There are more beaches in the blue flag scheme. The committee that validated those beaches said that it was
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shocked at the pollution, sewage and readily identifiable detritus from our sewage works that could be found on beaches that were put forward as being most eligible for blue flag status.
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