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ago in capacity would then find their bills going up to pay for an area which did not invest at that time. That would be highly unfair. The Kielder dam provides guaranteed water supplies to customers and industrial consumers in the north-east of England. One of the area's latest arrivals from abroad, the Fujitsu factory, has moved to the north-east simply because Northumbria Water could guarantee a regular supply. When the factory at Newton Aycliffe in County Durham starts to operate fully, it will use the daily equivalent of water to that used by a town of 100,000 people. The company went to the north-east because Northumbria Water could guarantee a regular supply come droughts. We never have hosepipe bans because we invested in our infrastructure. Northumbria Water is a regular spender of capital--it has spent about £35 million this year on improving drinking water. The water quality in a rural area that often has difficult supply problems is above the national average. The company spent £155 million on new sewers and £275 million on new treatment works. A rash of new sewage treatment works has opened up in the north-east. The local water companies seem keen to invite local Members of Parliament to open them. I cannot see the connection. We have not seen the hon. Member for Sedgefield for some time. One of the reasons might be that he opened a sewage works in his constituency recently. I had the pleasure of opening a £3 million scheme last Saturday in Haltwhistle in my constituency. My hon. Friend the Member for Langbaurgh (Mr. Bates), who is not present at the moment, also opened a £13 million scheme. Northumbria Water is setting a standard and the pace for good service, good quality and profitable operations.

We have another water company in the north-east--North East Water, which is another success story. Its annual meeting took place today. We learnt an interesting fact about disconnections from that meeting today. We have heard much about disconnections tonight, but disconnections in the Northumbria Water and North West Water areas have decreased since privatisation. Last year North East Water, which covers a large part of Tyneside and Wearside where there are problems with poverty, did not disconnect one household. It has reduced its disconnections to nil this year, for which its customers should be grateful.

Even that company believes, however, that sanctions should be available against the "Can pay, won't pay" customer. Those are the people on whom disconnections are targeted, not those people who cannot pay because of difficulties. Water companies bend over backwards to help those who need help, which is why North East Water ended up with no disconnections. If the companies do not have that sanction it will be a tax on other consumers who pay their bills. I realise that time is short so finally, in support of all those who work in the British water industry, I say "Well done." As a Northumbria Water consumer, and as someone who enjoys clean beaches and rivers, the 50p a day that I spend is money well spent. The River Tyne in my constituency is now the best salmon river in the country. Several years ago it was dead and nothing lived in it. Investment in clean beaches, clean rivers and a proper service system have shown that privatisation is an enormous success.

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6.2 pm

Mr. Nick Harvey (North Devon) : We are constantly told by the Government of the benefits of privatisation, but it is difficult to see that any benefits have arisen from the privatisation of the water industry. There is no competition in the industry, prices have risen dramatically, service is often poor, company profits have soared and, as other hon. Members have said, top salaries and share options are now at an indecent level.

At the time of privatisation, the Government claimed that water companies needed to be set free to raise capital in the marketplace. We were told that, by privatising the water companies, they would become more efficient. As a consequence, more money would be available to revitalise our water and sewerage system and the newly privatised water industry would be able to provide good and reasonably priced service, while dealing with the very real environmental concerns. In addition to those promises, we were told that average price increases would be no more than 5 per cent. above the inflation rate each year.

We await with interest the results of the Office of Water Services report that is due to come out shortly. It is the first chance to consider comprehensively the consequences of the Government's policy on water. We will see the way in which the consumer has borne the brunt of the effects of those policies, while private water companies have benefited substantially.

The public are paying for successive Governments' lack of investment in, and neglect of, the water industry. I was intrigued to hear the Minister say that the problems were all down to Labour Governments. The Conservatives have been in power for twice as long as Labour since the war. It was a wonder that he did not put it all down to the 11 months of the Lib -Lab pact. [Interruption.] I thought that the more rational Conservative Members would grab at that.

The truth of the matter is that the policy has been a disaster. The consequences have been disastrous for the consumer, the environment and the tourist industry. Coming from a constituency where surfing and recreation in the sea waters are essential to our economic prospects, I say so with genuine concern.

The National Consumer Council concluded in its recent report : "consumers have paid too much towards the cost of investment in the industry and the companies have received the lion's share of the benefits of privatisation."

The NCC observed that domestic water bills have increased, on average, by 67 per cent. since privatisation. Customers are paying £2 billion more than they would have been if charges had kept in line with inflation.

The hon. Member for Islington, South and Finsbury (Mr. Smith) referred to an article in the Financial Times and quoted Mr. Joe Rogaly, who had been writing about the industry. Mr. Rogaly also commented :

"Tory policies"

on water

"have made the poor worse off, in some cases absolutely as well as relatively. Making water high-cost for low income households is indecent."

Low-income households now spend more than 3 per cent. of their disposable income on water bills, compared with only 2 per cent. five years ago.

Other hon. Members have referred to the south-west, where local people are being forced to pay average water bills of more than £300--the highest in the country. Water

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charges have doubled in the past five years and are set to double again. The south-west is an area with many people on low incomes and with the highest proportion of pensioners. Although the average bill is £300, many households are paying more than £600. A pensioner living alone in the South West Water area spends more than 9 per cent. of his or her income on water.

Frankly, local people simply cannot afford to pay those bills. Members of Parliament of all parties who represent the south-west have people writing to them and coming to their surgeries to make that point time and again.

Meanwhile, the water companies' profits have risen by more than 20 per cent. each year in the five years since privatisation and dividend payments to shareholders have increased by about 63 per cent. per year. Furthermore, the bills have often increased way beyond increases in operating costs. One can only conclude that the regulatory system has failed to safeguard the interests of consumers. The Government and the water companies seem to have forgotten their social obligation to provide a service to the British people at an affordable price.

The regulatory system has compounded the problems that consumers face. While Ofwat has limited powers, the Government have repeatedly said that tackling rising bills and water quality is in the hands of the regulator. The Director-General of Water Services made it clear that he considers that his hands are tied and his ability to act is restricted.

The Government need to act on water bills, but all we hear from them are short-term solutions. As the hon. Member for Cornwall, South-East (Mr. Hicks) said in an earlier intervention, it is all very well coming up with a few schemes that will reduce the rate at which water bills increase during the next few years, but water bills in the south-west are already unacceptably high. We want some sign from the Government of how they are going to reduce those bills, not how bills that are already high will be increased, albeit at a slower pace.

The hon. Member for Cornwall, South-East was right. It is ludicrous for 3 per cent. of the population to pay for the clean-up of 30 per cent. of the nation's designated beaches. Before privatisation, the cost of cleaning up would have been spread around the country. At the point of privatisation, the Government recognised the justice of that when they gave South West Water a green dowry. It was not enough, but it was an acceptance of the principle that taxpayers in other parts of the country should contribute towards the cost of the clean-up in the south-west.

The Minister made the ridiculous claim that we were saying different things in different parts of the country and summoned as evidence, not a local leaflet issued by the candidates to whom he was referring, but the party's national manifesto. That was the very same document that had been published and distributed throughout the country so that everyone, including not only my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), but all his constituents could decide for themselves. We have made clear how we think the costs should met. Earlier, the hon. Member for Islington, South and Finsbury said how the Labour party would meet them. We need to hear from the Government how they will pay for the clean up.

As the hon. Member for South Hams (Mr. Steen) has already predicted, if the Government continue with their

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policy of loading costs on to the householder, they will suffer electoral annihilation. They need to grasp that point now or the same trend that we saw in local, county, general and the recent European elections will return to haunt them again and again. The south-west will not tolerate the level of bills that it already faces, let alone any increase.

The Government's response has been to redesignate certain areas of water in the south-west, saying that they did not need the clean up that they were due to get. Some sensitive coastal waters are to be redefined as high- dispersal areas. In effect, that means that, in those areas, semi-treated sewage can be pumped out to sea. A couple of weeks ago, Ministers announced the slowdown of the clean-up of four beaches in the south-west. To my astonishment, some hon. Members greeted that information with delight. I even one heard one say on the radio that he did not know of any of his constituents who would put more than a toe in sea waters.

I tell hon. Members who hold that view that many people who use the sea in my constituency and in that of my hon. Friend the Member for North Cornwall (Mr. Tyler) are noticing the state of the water and they will not be delighted by the news that the clean up is to be slowed down ; nor will tourists and surfers who come from all over the country and who are increasingly discerning about where to spend their holidays. The savings that hon. Members believe might accrue to householders will be more than offset by the damage that will be done to tourism in the south-west and the fact that people will go elsewhere because they know that bathing waters there are safer. The nation must pay for the clean up, which can be achieved by the means suggested by the hon. Member for Teignbridge (Mr. Nicholls) : getting the water companies in other parts of the country to pay some surplus of their profits. That is one way of paying for it, but it seems bizarre that the Conservatives should decide to privatise water companies, to put them into the marketplace and to allow them to try to achieve maximum profits for shareholders, and that they should then treat the industry as though it were still a nationalised industry and try to shift the profits from one area to other. It is, however, an option.

The second, and I think far better, option is to recognise that water bills are not a fair and just way of raising the money for the clean up, but that income tax is. That is why my party said in its manifesto, which we published throughout the country, that the costs should be borne by the taxpayer. Some parts of Europe are paying for the cost of their clean up by resort to European regional funds. It is false pride on Britain's part that is preventing Britain from drawing on the same source of funding.

I should like to raise the matter of how the unacceptably high level of bills is levied. A Labour Member said that the domestic rate valuations on which current water bills are based are ridiculously out of date. So, for the time being, it would be better to base them on council tax bands, which, although imperfect, have a benefits regime that helps people on low incomes and single-person households.

Our specific proposals are : the national taxpayer to help contribute to the costs ; council tax banding to be used for computing bill levels ; and a tougher regulatory regime. Only by implementing such proposals can the problems caused by privatisation be addressed. The Government must tackle the lack of price controls, protect the consumer and deal with the environmental challenge.

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6.14 pm

Mr. Patrick Nicholls (Teignbridge) : The only thing that can be said in favour of the speech of the hon. Member for North Devon (Mr. Harvey) is that he bounced himself and let the cat of the bag. He called for increased taxation. Some people may not understand how, in a country where taxation levels are already plenty high enough, an hon. Member can make a plea for his constituents to be taxed more, but the hon. Gentleman told us how he reached that position. The hon. Member for North Devon made a statement that was farcical, even for a member of the Liberal party. [Interruption.] If the hon. Gentleman would contain himself, he might learn something. It was obvious from his speech that he had learned nothing in the past four years, so today might be the opportunity to do so. We also learned that the hon. Gentleman thinks that the problems caused by pollution are caused by privatisation. [Interruption.] If he obtains a copy of Hansard tomorrow and looks up the quote, he will find that he said that the problems of pollution were caused by privatisation. The reason why we are in this position and why we have the problems of pollution is that Conservative and Labour Governments, over many years, have not invested in the water industry.

It is all very well for the hon. Gentleman to ask, "What have you been doing in the past 15 years ?" A more honest question would be, "What has the country been doing in the past 100 years ?" This country has not invested properly in cleaning up the nation's coasts. We must deal with that. The only way to do so is by spending money. One then enters the argument over how to raise those funds and how to spend them. To say that privatisation causes the problem, however, is nonsense. It would sound good on the doorstep. The hon. Member for North Devon gives separate arguments at separate doorsteps. He would no doubt say at one house, "We would have to increase national taxation, but it would not apply to you." All hon. Members know that the accusation to be laid at the door of Liberal Members is not that they change their attitude from constituency to constituency, but that they change their lines from doorstep to doorstep.

Mr. Paul Tyler (North Cornwall) : Will the hon. Gentleman give way ?

Mr. Nicholls : As a prime example of doorstep hopping, I shall give way to the hon. Gentleman in a moment. To present a policy that states that the deficiencies of the past 100 years are "all down to privatisation, guv" is nonsense.

Mr. Tyler : Is the hon. Gentleman aware that a number of his colleagues, some of whom are present, have advanced the same solution as my hon. Friend the Member for North Devon (Mr. Harvey) ? Is the hon. Gentleman saying to his hon. Friends that they are stepping out of line with party policy or that he is stepping out of line with the party, or are there different party policies for different constituencies in the south-west ?

Mr. Nicholls : It is up to hon. Members to justify their position. I said that it was fundamentally dishonest to pretend that the problems that we are having to cope with in the country, and in the west country in particular, in some way stem from privatisation. I am particularly concerned about the position in the west country, which is unique. It is not the Government's fault that Brussels has

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designated that about 455 beaches in this country must be brought up to standard and that 30 per cent. of those beaches are in the west country.

There is a water charge payer base of about 1.5 million people, who, let it be said, are predominantly elderly. That means that about 650,000 people in the west country have to be responsible for cleaning up one third of the nation's beaches. That is not the fault of the Government or of the House of Commons. The problem arises when one has a system whereby standards can be imposed which have not been debated in the House but which come from Europe.

Mr. Hicks indicated dissent .

Mr. Nicholls : I know that my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) has views and enthusiasms about Europe which are probably shared by most Opposition Members, but not by most Conservative Members. The standards that we are having to meet were imposed on us by Europe. Any honest and realistic assessment of how we cope with the problem on behalf of our constituents stems from how we deal with that matter.

Mr. Hicks : Since I am invited to respond, I have to say that, speaking personally and for no one other than myself, I would have no objection if this country, as a member of the European Community, agreed collectively to enhance water quality standards and sewage disposal standards. Surely my hon. Friend would not disagree that, having taken that decision, the British Government could make whatever adjustments and modifications they desired to deal with the genuine problems that the hon. Gentleman and my constituents face in meeting the cost of essential capital investment. The funds are there.

Mr. Nicholls : To some extent, I can agree with my hon. Friend ; but if conditions are imposed on us by Europe it is the Government's responsibility to do what they can to ameliorate their effects on us. The point that I am making to my hon. Friend, which is undeniable, is that the House did not set the standards or time scales, yet the Government have to cope with them.

Mr. Hicks : But we agreed them.

Mr. Nicholls : My hon. Friend may say that, but I do not believe, and I doubt whether any of my hon. Friends believes, that, if the House had set its own standards and time scales, we would be in this position. That is the essence of the problem.

We should be asking ourselves, and asking the Government, what has been done in the past four years to reduce the effect of charges. We heard something about that from the Minister of State and I suspect that we shall hear more about it from the Under-Secretary, but much effort has been made to ensure that, under doctrines such as subsidiarity, we get such decisions back within our own province and, as far as possible, try to set our own time scales.

No hon. Member is denying that beaches must be cleaned up. Nobody, with one or two exceptions, is suggesting that that can be done painlessly without it costing somebody money, but it is not sufficient to say that because the benefits are so marvellous we must proceed at breakneck pace. Whether we are spending money on water or any other worthwhile measure, we must try to ensure that we set a rate that people can afford, whether they are paying locally or nationally. It simply does not get

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someone off the hook to say, "Put it on the national Exchequer, then it does not matter." We shall make progress only by going with the grain of what people think they can afford.

The second way to make progress is to convey to South West Water that it, too, has a social responsibility to people, not simply to say, "Look at the benefits, pay up and stop complaining," but to understand how grievously upset people feel. It is all very well to say that tourists from the north, where water charges are only 20p a day, and windsurfers benefit from such measures, but I must tell the hon. Member for North Devon that I am not particularly concerned about windsurfers from the north.

I am desperately concerned about an elderly population who face water charges that they can cannot afford. Ultimately, those whose prime method of transport may be a Zimmer frame do not need to be told by the hon. Gentleman-- [ Interruption .] The hon. Member for North Devon obviously thinks that pensioners' problems are humorous, but it is nonsense to think that one can tell elderly or retired people in straitened circumstances that the answer to their problems is to go windsurfing.

Mr. Harvey : The hon. Gentleman represents a constituency that, like mine, is dependent on tourism. Is he seriously saying that he does not care about the water quality and conditions that surfers from the north will experience ? I think that hoteliers and others in the tourism industry in his constituency will be appalled by his attitude.

Mr. Nicholls : Of course I am not saying that, and the hon. Gentleman knows that I am not doing so. I am saying that a balance must be struck between doing things that are good and desirable and doing them at a pace that can be afforded. To set out, for simple, cheap, populist reasons, one example where benefits would accrue to tourists and windsurfers and to ignore the fact that many other humble, quiet elderly people do not see the argument in quite the same way is dishonest.

As I said before being treated to a rehash of the hon. Gentleman's speech, South West Water must realise that it is not sufficient to say that charges are going up and that that is the end of it. I know the effort that Ministers have made in the past four years to convey a proper sense of urgency to South West Water about that. Ultimately, what has been achieved ? The hon. Member for North Devon said--I expect that he will deny it, but I wrote it down--that water charges were set to double again.

Mr. Harvey indicated assent .

Mr. Nicholls : He is saying it again. The hon. Gentleman knows--and, if he does not, the hon. Member for North Cornwall certainly does--that there is no question of water charges doubling again. We now know, as a result of efforts that have been made, that the increase in water charges next year should be in the band of inflation plus 2 per cent. That is not a scenario that promises the doubling of water charges in the foreseeable future. It is the efforts that Ministers and west country Members from Devon and Cornwall have made that have made the difference.

I referred to the European dimension. I remember asking an Italian Environment Minister some years ago,

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"Why are water standards imposed on Britain in a way that we know they are never imposed on the continent ?" He said, "Because your political parties keep telling us in Europe how bad your beaches are, and if you keep going on about it ultimately we cannot turn a blind eye to it." I say from my experience in government and as a Back Bencher, imagine how much easier the job of Ministers would have been in trying to make progress in Europe if they had been able to say that Conservatives, Liberals, Labour and the rest--everyone in the west country across the political board--was behind Ministers' efforts to alleviate the problem.

We did not see that. We saw--especially from the Liberals, because in the west country the Labour party is merely a tedious irrelevance--that at every opportunity when Liberal Members could have combined with Conservative Members to achieve something, they did not want to know. The ultimate condemnation for the Liberal party when the history books finally come to be written will be that, faced with a choice between doing something to help people in the west country about water charges and merely exploiting the fact that the Government could not act quickly enough, exploitation won and their constituents missed out. That is the moral of this unhappy affair. The good point is that, at long last, the end of the misery is in sight.

6.26 pm

Mrs. Helen Jackson (Sheffield, Hillsborough) : This debate should have been called by the Government, not by the Opposition. It is scandalous that the Government thought that they could get away with announcing the five-year pricing review next week without making a statement to the House. It would have caused no problem to ask Mr. Byatt to bring the review forward a week or two so that a statement could have been made to the House and the subject discussed properly.

Last week, fortunately, the National Consumer Council issued a report, which I commend to hon. Members, that carefully considered the financial facts and figures of the water industry in the past five years. Its conclusions are quite mild, although it says that consumers have not had a fair deal over water prices. The statistics speak for themselves.

Two failures stand out since water was privatised in England and Wales five years ago, and both can be laid at the Government's door. First, the water companies have failed to understand their job. Their purpose is simply to offer an essential service to the public, who want plenty of clean water for daily needs and who want their waste and sewage to be disposed of safely.

They do not want their supplies to be measured drop by drop. They do not want to worry if their children go through a patch of bedwetting or if their elderly relatives become incontinent-- problems that 1.5 million households experience every year. They know that there is a cost, and always has been, but they expect water to be affordable and easy to pay for, because it is one service that no household can do without.

The second failure is that no one-- certainly not the watchdog or the regulator-- looks after the consumer's interest. The companies have taken the Government at their word. The companies are now bigwigs in the market : they have capital assets of £150 billion. So what do they do ?

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First, they reward themselves. They are, after all, extremely big fish in the market, and they think that they deserve extremely big pay-offs and rewards--£500,000 is the going rate. Secondly, they look around--as the Minister was boasting--to see how they can become even bigger. They look at the water supply in Turkey, Israel and around the world, and become global companies. Thirdly, as the Government suggest in their deregulation legislation, the companies look to see what constraints are burdens. They look at the European regulations to see if they can appeal against them or take longer to comply with them.

Finally, the companies run pricing tests to see how much of the burden the consumer will bear. As we have heard, and as my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson) is dying to say, the tests have increased prices by more than 100 per cent. in the south-west. Price increases are running at an average of 67 per cent. To their delight, the companies find that consumers still buy their services, because they have no choice. Water is the ultimate monopoly.

Some households always find it hard to keep up and hard to pay, but the companies can disconnect them or put them on a stringent system of rationing and pre-payments. For the water companies, the world is their oyster. Who is there to prevent them enjoying the benefits ? People thought that, under privatisation, the person with that job would be the regulator, Ian Byatt, but the facts have shown them to be wrong. He has worked to protect the companies in the market, but failed to exercise any control on behalf of consumers.

Mr. Byatt advances the premise that I have heard this afternoon, that water price rises will be kept between 0 and 2 per cent. Does that mean exactly 0 and 2 per cent. ? No, it means between 0 and 2 per cent. above inflation. The water regulator has never accepted that water prices should rise by a negative K value, decrease or be limited to inflation. As a result, profits and perks have soared and the regulator has done nothing.

Indeed, he still says that surplus profits are perfectly in order, because they offer companies an incentive to make efficiency savings. The surplus profits and payouts that have been made do not represent anything in the way of an incentive to make efficiency savings. The regulator does not believe in regulation.

He started with an open debate on the cost of quality, but as soon as criticisms were made by the National Rivers Authority about the figures given by the companies, he closed the debate. We now have a one-man show-- Mr. Byatt alone will decide the price caps. There will be no appeal except to the Monopolies and Mergers Commission. The price review out next week has become a farce.

Even on consumer issues, where there is a consensus, the water regulator has failed to take action. When he has a regional chairman in Yorkshire who sticks up for consumers, Diana Scott, the water regulator sacks her. On no major issue has the water regulator backed consumer concern against the advice of water companies or the Government. That is no way to regulate our most crucial public asset.

We must sort the matter out for the public. The Government are clearly proposing to do nothing, but defend the system that we have. We must make proposals to resolve the problem. We can sort it out through the charging system. Are we paying for a commodity, such as

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jam or potatoes, where one pays for what one uses, or are we paying for an essential service, such as health or cleansing, where one pays for what one needs ?

At present, we pay through water rates, but we must have a new system, because the present one is out of date. The council tax banding system has replaced the rating system. That banding system offers a flexible, ready- made and cheap-to-run new property-based system. This afternoon is the first time that I have heard a Minister even suggest that it may be in order to use the banding system in that way.

I am cheered by that suggestion, but I shall believe it if the Government will tomorrow back it up by saying clearly that new houses do not have to be compulsorily metered. I will believe it if the Government give housing corporations and any new householder the option of metering or negotiating the cost with the water company on the basis of the council tax band. If they do that, I shall believe that the Government are genuine in their efforts.

I am speaking quickly without going into each subject in detail, because I am aware of the time. There is a conservation argument, but the Government, and certainly the water companies and the public, must be aware that one quarter of all water supplied through the system is lost through leakage.

A far cheaper way of conserving water supplies than placing the burden unfairly on domestic householders through metering would be to address the problem of the 25 per cent. leakage rate and introduce a programme to install showers, sprinklers and dual-flush toilets. That would save the same amount of water at a quarter the cost of metering, and would provide the first step in bringing water under public control.

The first thing that the public want to control is what they pay for water and how they pay it. That is what I mean by bringing the water industry back into public control, but that is only a start. We shall achieve our aim only if we have a fundamental review of the regulatory system that puts the public--the consumer--first in the policy that deals with the world's major public need.

We need a system that delivers even-handed pricing across the country. Why should the south-west pay three times more than the rest of the country ? We do not pay three times more in London for the health service if there is a flu epidemic--why should the south-west pay three times as much because the area has a longer coastline ? It is nonsense.

Mr. Nicholls : Will the hon. Lady give way ?

Mrs. Jackson : No, I cannot give way, because of the limited time available.

We need a system that opens up the decisions of the water companies to public view and puts an end to the gross pay-offs, dividends and rip-offs of the present system. We do not want the Government's present approach, which is to do nothing. We need action to be taken urgently. The public are making hon. Members aware of that urgency. 6.37 pm

Mrs. Elizabeth Peacock (Batley and Spen) : I apologise to the Minister for not being present at the start of the debate, when I was unavoidably detained, although I did hear some of his speech.

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There is genuine concern among hon. Members about the price of water. While many of us recognise the success of the water companies in winning contracts abroad, they have some responsibility to consumers at home. Of course we appreciate the improvements that have been made, many of which are visible. I always appreciate that those improvements have to be paid for, but more of the costs could come from some of the profits which could be reinvested.

There is nothing wrong in making profits, but it depends on what ultimately happens to them. I know of no other companies involved in producing goods that can expect such a profit on their goods or such a return for their shareholders. A Treasury Minister has had something to say about large dividends. Most companies do not enjoy large dividends, but perhaps water companies do.

Manufacturers in my part of the world cannot keep raising their prices, unlike the water companies. Sainsbury and Marks and Spencer would not pay more for their manufactured goods, because they know that they cannot pass on the price increases to their customers. Water is surely more essential than anything else.

I do not believe that compulsory metering is a good idea. It may be ideal for those who live alone, but it entails grave disadvantages for families.

Mr. Rupert Allason (Torbay) rose

Mrs. Peacock : No, I have only a few minutes.

We should look carefully at linking charges for water with council tax banding. That would be much fairer for most people. I am worried about very low-income families who find that they cannot pay their water bills--it is not a matter of "won't pay" ; it is a case of "can't pay". If their water is cut off, according to the rules of this country, their accommodation becomes unfit for human habitation. Conservative Governments have spent many years providing much better accommodation for families, so that they can all enjoy these facilities. I do not want to turn the clock back to the last century.

I am sure that the Minister will point out that disconnections are falling. They have certainly fallen in Yorkshire in the past year or so, partly as a result of pressure brought to bear in Parliament, and partly as a result of people's own efforts. It is not possible, however, to disconnect water supplies in Scotland and Northern Ireland. I should like the Minister to tell us why we are different. If the system works there with no ultimate sanction, why cannot it work in England too ?

It is true to say, as Yorkshire Water says, that most families pay up and have their water reconnected within 48 hours. Of course : but many people who cannot pay find the money to pay by going to loan sharks. Then their families end up in greater debt, so that they can have their water reconnected. Perhaps the Minister will say that this is someone else's responsibility, and that some other agency should help to provide the cash- -but that is not what happens.

We must be extremely cautious. Water is essential to life. No one can go anywhere else for water--there is no competition. It is not as if we can leave Sainsbury and go down the street to Marks and Spencer. Water has to be piped to people's homes ; the water companies have a captive audience. We should all try to help the water

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companies to provide the sort of service that we would like all the families in our areas to enjoy, and at a reasonable cost that continues to be affordable.

6.42 pm

Mr. David Jamieson (Plymouth, Devonport) : I welcome the opportunity to speak tonight, because, if there is one issue that is important to the south-west, it is the price of water. I am surprised to note that only one Conservative Member from the south-west has been in the Chamber for most of the debate. I should have expected the hon. Member for Teignbridge (Mr. Nicholls) to stand up and apologise on behalf of his colleagues who, in 1989, voted for the water privatisation legislation which has caused the high prices in the south-west

Mr. Allason rose

Mr. Jamieson : I shall not give way to the hon. Gentleman. I thought that Conservative Members would come here this evening and explain why their flagship policy has caused such high prices in my region.

It has been said tonight that water prices have risen around the country, but in the past five years they have doubled in the south-west--and for those who are least able to afford such rises. Mr. Nicholls rose

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