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Mr. Jamieson : The National Consumer Council has clearly stated that the very poorest people in the south-west are spending 12.9 per cent. of their total incomes--or £1 in every £8--on water. We heard not a word about that from Tory Members today.

I can tell Conservative Members why we need clean beaches in the south- west. We need them for the people who live there ; we need them for the tourist industry. We need investment in our area so that we can bring in the tourists. The hon. Member for Teignbridge totally failed to explain the fact that under the privatisation system cross-subsidies have gone. That is why he and his colleagues, by voting to privatise water, inflicted high water prices on the people in the south-west.

Mr. Jacques Arnold : On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker : It had better be a point of order.

Mr. Arnold : Is it in order for an hon. Member to impugn the motives of other hon. Members who were here during this debate--such as my hon. Friends the Members for Cornwall, South-East (Mr. Hicks) and for Falmouth and Camborne (Mr. Coe) ?

Mr. Deputy Speaker : That is certainly not a point of order.

Mr. Jamieson : I am sorry that time has been wasted by a bogus point of order.

The people of the south-west have been betrayed by the Conservatives. The hon. Member for Teignbridge talked about the tedious irrelevance of the Labour party in the south-west

Mr. Nicholls rose

Mr. Jamieson : Not another bogus point of order, I hope.

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Column 231

Mr. Nicholls : On a point of order, Mr. Deputy Speaker. Is it not a convention of the House that, if an hon. Member refers to another by name, he gives way to him ? Were the hon. Gentleman to give way to me, I would have the chance to ask him to explain why he voted against my Bill.

Mr. Deputy Speaker : The summer season seems to be well upon us.

Mr. Jamieson : Thank you, Mr. Deputy Speaker. I was surprised to hear the hon. Gentleman speaking about water at all tonight ; he is usually associated with a stronger drink than that

Mr. Deputy Speaker : Order. I should be grateful if the hon. Gentleman withdrew that remark immediately.

Mr. Jamieson : I do withdraw it, Mr. Deputy Speaker. I look forward to sharing

Mr. Nicholls rose

Mr. Deputy Speaker : Order. I believe that the hon. Member for Plymouth, Devonport (Mr. Jamieson) has resumed his seat. Mr. George Howarth.

6.45 pm

Mr. George Howarth (Knowsley, North) : This has been a useful debate. As the Government are not prepared to discuss their water policies in the House of Commons, the Opposition have chosen our last half Supply day--in the event, somewhat less than half a day--to debate the subject of water.

I should like to begin by commenting on the Minister's opening speech-- [Interruption.] --if he is willing to listen, that is. I do not think that he was listening even to his own speech half the time. The Minister offered robust support for privatisation and the activities of the water companies, as we might expect. Obviously, he was a member of the governing party, and probably voted for privatisation, in 1989. That being so, he would have to say what he said today.

I have been doing a little research, however, into the other reasons why Conservative Members might support the activities of the water companies. Might it have something to do with the fact that 23 directors of water companies are also directors of companies that donate directly to the Tory party ? The Minister stoutly defended Thames Water, and maligned the motives of those who attack that company. Is it possible that the £50,000 that Thames Water gave the Conservative party in 1992, just before the election, had something to do with the strength of support that Conservative Members offered the company today ?

I also wonder whether Mr. John Murray Thompson, a director of Thames Water

Mr. Atkins : Never heard of him.

Mr. Howarth : Well, the hon. Gentleman ought to have. He is also a director of Scottish and Newcastle Breweries, which was responsible for donating £70,000 to the Tory party in 1992. The Minister went on stoutly to defend the activities of North West Water. I agree with him that it provides a good service for our constituents--some of its activities are good-- [Interruption.] The hon. Member for Gravesham (Mr. Arnold) accuses me of being down in the gutter. Even if I got down there, that would still leave me several feet higher than him.

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But let us say a word or two about North West Water and its chairman, Sir Desmond Pitcher. I wonder whether the support of the hon. Gentleman and the Tory party has something to do with the fact that, between 1979 and 1992, Sir Desmond Pitcher, when he was chairman of Littlewoods, donated £160,000 to the Tory party finances. [Interruption.] Conservative Members say, "So what ?" I shall tell them. Sir Desmond Pitcher is now getting his richly deserved--from the Tory point of view--reward, with an annual salary of £263,000, bonuses of £75,000 and, no doubt, enormous benefits from his preferential share deals. The list goes on. But the facts mean that we cannot take the Minister's defence of the water companies and their privatisation terribly seriously.

What benefits have consumers had from privatisation ? Is the Minister willing, for example, to defend the fact that disconnections have increased by 48 per cent. since privatisation ? The Minister defended it by saying that they came in in 1945. Let me tell him that they have increased dramatically, as has the cost to the consumer, and for the very reason that many of those people simply cannot afford to pay their water bills. Is he defending the fact that bills have gone up by 67 per cent ? "Well," he says, "that is because we have had to invest all this money in all these improvements that we have been going to carry out." What happened to the promise given at privatisation that all the money for those improvements would be borrowed on the commercial markets ? That has not happened at all. The consumers have had to pay for them.

Is the Minister defending, for example, the fact that profits are up by 125 per cent. ? Is he willing to defend the fact that, in the same period, the salaries of water company chairmen have gone up by 133 per cent. ? No, I do not think so. The truth is that the capital projects, which are good and necessary, have been paid for not by the water companies, but by the consumers. They have not been paid for by commercial borrowing. The money has had to be raised through the consumers.

We are given the impression by the Minister that the consumers are getting a marvellous deal. How much have they paid through charges for all those improvements ? The amount was £2.7 billion. Yet, during the same period, dividends, or payments for shareholders, increased by 63 per cent.- -a cumulative payment of £2.9 billion. That is more than even the consumers have been expected to pay to fund the improvements. Share values have increased by 99 per cent. since 1990. During the same period, in general, share values on the FT index have gone up by only 39 per cent.

The people who have been hit worst by privatisation are those in our community with the least income. Before privatisation, the average person living on benefit was expected to pay 2.5 per cent. of his or her income on water charges. Since privatisation, that has risen to 3.2 per cent. South West Water has been referred to extensively. Since privatisation, its bills have increased dramatically to £304 a year. Pensioners are being asked to pay 9 per cent. of their income on water charges alone. That is absolutely scandalous. In 1993-94, 12,452 people had their water cut off. Privatisation has been a rip-off, and it will be a rip-off that will come to haunt the Government. I recommend the motion, which stands in the names of my right hon. and hon. Friends, to the House.

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6.53 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry) : Labour bangs on about privatisation generally--so perhaps it is worth reminding ourselves of a few facts. It is worth recalling that, under the previous Labour Government, nationalised industries, including the nationalised water industry, made losses--large losses. In 1979, when Labour left office, the losses of the nationalised industries cost taxpayers £35 million each and every week in today's money. That was some £35 million of taxpayers' money being spent on meeting losses, which was therefore not available to invest in the national health service, in schools or for the benefit of pensioners.

By contrast, today, the privatised companies, including the privatised water companies, are paying about £50 million per week into the Exchequer. That is money that can be used in the NHS, for schools and for the benefit of pensioners.

It is worth recalling that in 1976 the previous Labour Government-- supported at the time by the Liberals--overnight announced a moratorium on all new construction work by water companies. The previous Labour Government cut their spending on the water industry generally by 30 per cent. and, specifically, cut their capital investment on sewerage by 50 per cent. Labour policies resulted in economic mismanagement and environmental neglect. It is, in part, the Labour party's dereliction of duty that we have had to tackle--and we have done so to the benefit of consumers and the environment. However, the truth is that the Labour party is in a mess on its policy for water. It cannot bring itself to admit and acknowledge the success of privatisation, yet cannot bring itself to say what it would do differently.

The right hon. Member for Derby, South (Mrs. Beckett), who, at the moment, seems to be acting leader of the Labour party, was quoted last month, in "Water Bulletin", as saying :

"There is one area where we might be looking for some new form of public control and that is water . . . I am neither ruling in nor ruling out a 100 per cent. ownership".

Heavens above, one would have thought that the Labour party should either have the guts to say that it will renationalise the water industry, or not. But, clearly, it is too much to expect the Labour party of designer suits and blow-dry hairstyles to make it clear whether it would be prepared for an incoming Labour Government to spend several billions of pounds of public money buying back shares in the water companies rather than investing in improving environmental protection.

Indeed, only this month out comes yet another Labour party policy document on the environment, produced by the hon. Member for Islington, South and Finsbury (Mr. Smith), who is giggling at the moment, with no fewer than seven members of the shadow Cabinet involved. But what is interesting about the document--entitled "Report of the Labour Party Policy Commission on the Environment"--is that at no time did either Opposition Front-Bench spokesman make any reference to it. I am not surprised, because it has 218 paragraphs, and, pathetically, just five of them deal with water.

Does that document make Labour policy on water any clearer ? The House must judge, for in a gem of blur-like opaqueness, which now characterises Labour policy, it states :

"We will ensure that the actions of all private water companies are under public control."

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We look forward in the coming months to hearing from Labour Members just what is meant by that, or, as one Labour Member said, "Democratic public control, comrades." But the truth, I suspect, is that they do not really know themselves.

Labour bangs on about profits. It is a sobering thought that the new model Labour party still finds "profits" a dirty word. But the reality is that water companies need to be profitable to fund capital investment programmes. Indeed, water companies are reinvesting up to two thirds of profits, and all companies are spending more on investment than they are earning in profits. Some, such as Northumbrian and Anglian, are spending up to twice as much. The water companies have been investing £3 billion a year since privatisation to make up for the earlier chronic under- investment when the water industry

Mr. Salmond : On a point of order, Madam Deputy Speaker. You will have noticed that the motion and amendments before us specifically mention Scottish issues. Neither the Minister for the Environment and Countryside nor the Under-Secretary of State have chosen to mention Scotland in their speeches. Is it in order for those on the Government Front Bench to ignore the motion that we are debating ?

Madam Deputy Speaker (Dame Janet Fookes) : The Chair is not responsible for the content of a speech, save whether it is relevant or not.

Mr. Baldry : I have not heard very much from anyone in the House about Scotland today. But what I did hear was the Labour party banging on about prices and choosing to ignore the fact that investment by the water companies in improving water quality and standards is massive. It works out at about £8 million a day--£5,000 every minute, and, on average, some £960 per household in the five years to 1995. All water services for the average householder in England cost about 55p a day, which is less than the cost of a bottle of fizzy water. That is a reasonable sum to ensure high standards by the water companies.

What is more, customers have more than got their money back through new investment in water services, which over five years averages £960 per household. That is £192 a year, 52p a day, in new investment for every household in the country. Against that background the average charge of 55p a day cannot be said by any fair-minded person to be unreasonable.

Mr. Jon Owen Jones (Cardiff, Central) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to. Question put accordingly, That the original words stand part of the Bill :--

The House divided : Ayes 257, Noes 291.

Division No. 298] [7.02 pm

AYES

Abbott, Ms Diane

Adams, Mrs Irene

Allen, Graham

Alton, David

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashton, Joe

Austin-Walker, John

Banks, Tony (Newham NW)

Barnes, Harry

Barron, Kevin

Battle, John

Beckett, Rt Hon Margaret

Beggs, Roy

Beith, Rt Hon A. J.

Bell, Stuart

Benn, Rt Hon Tony

Bennett, Andrew F.

Benton, Joe

Bermingham, Gerald

Berry, Roger

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Column 235

Betts, Clive

Blair, Tony

Blunkett, David

Boyes, Roland

Bradley, Keith

Brown, Gordon (Dunfermline E)

Brown, N. (N'c'tle upon Tyne E)

Burden, Richard

Byers, Stephen

Caborn, Richard

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Menzies (Fife NE)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D. N.

Canavan, Dennis

Carlile, Alexander (Montgomry)

Chidgey, David

Chisholm, Malcolm

Church, Judith

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Connarty, Michael

Corbett, Robin

Corbyn, Jeremy

Corston, Ms Jean

Cousins, Jim

Cox, Tom

Cunliffe, Lawrence

Cunningham, Jim (Covy SE)

Cunningham, Rt Hon Dr John

Dalyell, Tam

Davidson, Ian

Davies, Bryan (Oldham C'tral)

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham, H'dge H'l)

Denham, John

Dewar, Donald

Dixon, Don

Dobson, Frank

Donohoe, Brian H.

Dowd, Jim

Dunwoody, Mrs Gwyneth

Eagle, Ms Angela

Enright, Derek

Etherington, Bill

Evans, John (St Helens N)

Ewing, Mrs Margaret

Fatchett, Derek

Faulds, Andrew

Fisher, Mark

Flynn, Paul

Foster, Rt Hon Derek

Foster, Don (Bath)

Foulkes, George

Fraser, John

Fyfe, Maria

Galloway, George

Gapes, Mike

Garrett, John

Gerrard, Neil

Gilbert, Rt Hon Dr John

Godman, Dr Norman A.

Godsiff, Roger

Golding, Mrs Llin

Gordon, Mildred

Grant, Bernie (Tottenham)

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Gunnell, John

Hain, Peter

Hall, Mike

Hanson, David

Hardy, Peter

Harman, Ms Harriet

Harvey, Nick

Hattersley, Rt Hon Roy

Henderson, Doug

Heppell, John

Hill, Keith (Streatham)

Hinchliffe, David

Hodge, Margaret

Hoey, Kate

Hogg, Norman (Cumbernauld)

Hoon, Geoffrey

Howarth, George (Knowsley N)

Hoyle, Doug

Hughes, Kevin (Doncaster N)

Hughes, Robert (Aberdeen N)

Hughes, Simon (Southwark)

Hutton, John

Illsley, Eric

Ingram, Adam

Jackson, Glenda (H'stead)

Jackson, Helen (Shef'ld, H)

Jamieson, David

Johnston, Sir Russell

Jones, Barry (Alyn and D'side)

Jones, Jon Owen (Cardiff C)

Jones, Lynne (B'ham S O)

Jones, Martyn (Clwyd, SW)

Jones, Nigel (Cheltenham)

Jowell, Tessa

Keen, Alan

Kennedy, Charles (Ross,C&S)

Kennedy, Jane (Lpool Brdgn)

Khabra, Piara S.

Kinnock, Rt Hon Neil (Islwyn)

Kirkwood, Archy

Lestor, Joan (Eccles)

Lewis, Terry

Liddell, Helen

Livingstone, Ken

Lloyd, Tony (Stretford)

Llwyd, Elfyn

Loyden, Eddie

Lynne, Ms Liz

McAllion, John

McAvoy, Thomas

McCartney, Ian

Macdonald, Calum

McFall, John

McKelvey, William

Mackinlay, Andrew

McLeish, Henry

McMaster, Gordon

McNamara, Kevin

MacShane, Denis

McWilliam, John

Madden, Max

Maddock, Mrs Diana

Mahon, Alice

Mandelson, Peter

Marek, Dr John

Martin, Michael J. (Springburn)

Martlew, Eric

Maxton, John

Meacher, Michael

Michael, Alun

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Argyll Bute)

Milburn, Alan

Miller, Andrew

Mitchell, Austin (Gt Grimsby)

Morgan, Rhodri

Morley, Elliot

Morris, Rt Hon A. (Wy'nshawe)

Morris, Rt Hon J. (Aberavon)

Mowlam, Marjorie

Mudie, George

Mullin, Chris

O'Brien, Michael (N W'kshire)

O'Brien, William (Normanton)

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