House of Commons Hansard Debates for 4 May 1995

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throughout the United Kingdom. As for the Government programme, the battle of Britain memorial flight and the Red Arrows will be in the skies over London. The sight of RAF uniforms and the sound of RAF bands will be much in evidence on the ground and, in view of the tremendous and almost overwhelming support that the air cadets have rightly received tonight, I am particularly pleased to tell the House that the air cadets will also be heavily involved in the commemorations.

Veterans all over the land and, I am sure and hope, many young people, will mark the anniversary in their own towns, cities and villages and remember with us the great debt that we owe. I draw the attention of the House to just one of those events outside London. The special ceremony at the United States war cemetery at Cambridge will remember those members of the US air force stationed at bases throughout East Anglia who lost their lives flying so many day-time raids, particularly in the period leading up to the Normandy landings.

Mention of the United States air force brings to mind the many other allies with whom the RAF worked during the second world war. The wartime RAF was a force that included many nationalities. Among the most famous squadrons were the Polish and Czech squadrons of which my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) spoke so movingly. At the very gate of his constituency stands an incredibly beautiful memorial to them. One of the welcome benefits of the end of the cold war has been that the RAF is now able to rebuild closer ties with the air forces of those countries.

There were, however, also Belgian, Dutch, French, Greek, Norwegian and Yugoslav squadrons and, of course, the very many from the Commonwealth who fought and died in the air battle. It is entirely appropriate, therefore, that this weekend's commemorations will have a thoroughly international flavour.

The Royal Air Force of 1995 may be vastly different from that of 1945 in many respects, but today's service still maintains the devotion to duty, the professionalism, the determination and the ethos that characterised the service's contribution to the second world war and helped to establish an enduring peace between the major powers.

In the six years of that war, air power grew from adolescence to maturity. Fifty years on, air power continues to provide an ultimate insurance in high-intensity conflict and increasing flexibility for peace support operations. I wholly endorse the sentiment expressed by the hon. Member for Stockton, North (Mr. Cook) on the question of peacekeeping operations. Incidentally, the reason why British troops, our Air Force and, indeed, the Navy are so very good at such operations is that they are trained to fight in high-intensity conflicts. It is only by training to keep those standards that we shall continue to be able to meet our obligations.

We should not let anyone say that peacekeeping is a soft option. What is happening in Bosnia now represents a difficult and challenging form of soldiering made all the more difficult by the requirement to exercise constant and almost unbelievable restraint.

Mr. Robert Key (Salisbury): Other members of the Select Committee on Defence and I have just returned from Naples where we briefed at NATO headquarters. I wish to put on record our gratitude to the men and women of the Royal Air Force who are playing their part in the conflict to which my hon. Friend referred. May I also

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point out that we have a new ally in Italy, and it is becoming increasingly strange that Italy is not a member of the contact group. As we shall rely increasingly and almost exclusively on Italy in that enterprise, I hope that my hon. Friend will consider that fact.

Mr. Soames: I thought that my hon. Friend had been to Italy because of the colour of his trousers. I take his point and will bear it in mind when the contact group and associated discussions come about again.

The Royal Air Force meets the vital requirement for mobility and the rapid projection of power. Its inherent flexibility makes it well qualified to react to a broad range of contingencies. The RAF today has a proud tradition to maintain, a tradition that was forged in the skies of Europe, Africa and Asia and that continues daily, most visibly in the skies over Bosnia and Iraq.

I know that Opposition Members are always amused by the fact that, whenever I speak, I catalogue the places where I have visited our armed forces, so I shall not let them down this time. I have just returned from visiting British forces deployed in Italy, although I restrained myself in my trouserwear.

I visited the aircraft carrier Illustrious in the Adriatic and the various deployments in Yugoslavia. As always, I was hugely impressed, as hon. Members of all parties have been, by the commitment and dedication of the service men and women and the civilians who work alongside them.

I was struck by the progress that had been made at Gioia del Colle since my previous visit there. There is no doubt that, with the increased experience of the operating environment, the Royal Air Force organisation at the base has become extremely impressive. I met the ground crews and support staff, who sustain the Tornados and Jaguars in their very important roles.

Since April 1993, when the Jaguars and Tornados started operations at Gioia del Colle, the Tornados have flown more than 2,300 operational sorties, the Jaguars more than 2,800. They are doing a wonderful job, and I know that the whole House will wish to pay a warm tribute to them.

I would also like to take this opportunity, in the spirit that my hon. Friend the Member for Salisbury (Mr. Key) mentioned, to pay a warm tribute to our Italian hosts. It is quite plain that they value and enjoy the presence of the Royal Air Force. No trouble has been too much for them. I am extremely grateful particularly to the base commander and his immediate staff for all their kindness, help and support for the British forces, which is greatly appreciated. We should also remember the wonderful work that the Hercules detachment has been doing from Ancona. Since February 1992, it has dropped 24,000 tonnes of humanitarian aid in more than 1,700 sorties. Two TriStar tankers provide air-to-air refuelling. Royal naval and allied aircraft taking part in operations over the former Yugoslavia are sustained by them, while sentry aircraft fly from Aviano in northern Italy, as part of the NATO airborne early warning force monitoring the air exclusion zone over Bosnia.

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The RAF has also played an important part in the crisis in Rwanda, and has helped to deploy our troops to Angola. In fact, not a single front-line operational aircraft in the Royal Air Force has not been deployed somewhere in the world on operations.

Mr. Hardy: Will the Minister give way?

Mr. Soames: If the hon. Gentleman will forgive me, I shall not give way. I am trying to deal with the points that have been raised. The value placed on those prolonged and demanding activities by the international community is testament both to the efficiency of the Royal Air Force and to the commitment and efforts of those who serve in it. That ethos of dedication and professionalism binds aircrew support staff and their families, and forms the very backbone of the Royal Air Force.

I pay particular tribute to the families of those who are deployed overseas. They make real sacrifices, and the Government recognise and understand the difficulties that separation can cause. We have a firm commitment to try to bring a greater stability in order to shorten such separations. Certainly, the Jaguar squadrons at Coltishall, for example, have had an extraordinarily demanding year and have spent a great deal of time away.

Closer to home, Mr. Deputy Speaker, the Royal Air Force, as you will know only too well, continues to provide the most splendid support in Northern Ireland. Although the ceasefire arrangements are to be welcomed and have allowed some relaxation of our security arrangements, it remains necessary to maintain a high state of vigilance.

I am pleased to be able to tell the House that, as a result of the ceasefire, for the first time in 25 years, RAF Aldergrove will hold an open day for members of the public at the end of May, and the Queen's Colour Squadron will parade through the streets of Belfast. Since RAF matters were previously debated in the House, we have had the "Front Line First" exercise, to which several hon. Members have referred. For the RAF, it has meant a period of very extensive and profound change. It has meant that some airfields that have played a prominent role in the past, such as Scampton and Finningley, will close and flying training will be concentrated at four stations. We now no longer need two RAF bases in Germany, and the Harriers and support helicopters currently based at RAF Laarbruch will be redeployed.

We do not underestimate the very hard work that is required at all levels if the ambitious targets that have been set are to be achieved. I have been fortunate to visit a large number of Royal Air Force establishments, at both command and unit level, and have been hugely impressed by the attitude and quality that I have seen. In the time remaining, I propose to try to deal with some of the points that have been made. I start by thanking the hon. Member for Carlisle (Mr. Martlew) for his gracious and kind words about my presence at the Dispatch Box. Indeed, it is genuinely a source of huge pride that, 50 years on, I should be able to speak in this debate from the Dispatch Box. I also warmly endorse the hon. Gentleman's views on the quality of

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our aircraft, and I join his tributes to Dowding and Harris. I also join his warm and handsome tribute to all those who serve in the Royal Air Force.

My right hon. Friend the Minister of State for Defence Procurement will write to the hon. Gentleman about the questions that he asked on the procurement side, about the European fighter aircraft and Tornado, although he has already dealt with some of those points. The hon. Gentleman also asked about search and rescue, with which I shall have to deal at greater length in a letter. I shall write him one tomorrow.

I accept the anxieties that we all have about the Bett report, but the whole point of that report is that it is a Green Paper. Nothing in Bett is cast in tablets of stone. There is still a great deal of work to be done on it--but no one should be deceived into thinking that there is any element in it that is not worthy of the most serious, worthwhile, hard work and staffing to find out whether its recommendations are suitable for our services. I believe that the report represents a sensible way forward in many respects, although plainly there will be areas that we are less happy about than others.

I do not wish to break the consensus in the debate, but the remarks of the hon. Member for Carlisle about the attitude of my right hon. and learned Friend the Secretary of State for Defence in his dealings with Sir Sandy Wilson were wholly strange to the truth--I shall say no more than that. I shall deal in more detail with Sir Sandy Wilson when I respond to the hon. Gentleman, so I am afraid that I cannot say such warm words about the end of his speech as I did about the beginning.

My right hon. Friend the Member for Northavon (Sir J. Cope), who is extremely knowledgeable about the aviation industry, praised my right hon. Friend the Minister of State for Defence Procurement for the successful policies that he has put in place to sustain the defence industrial base.

My right hon. Friend the Member for Northavon also spoke about the university air squadrons. I am well aware of his close interest in that subject. He and I have engaged in a protracted correspondence about it, and I have high hopes that if that continues we may yet be able to have a meeting to discuss the matter. Work is in hand to find out whether greater cost-effectiveness and efficiency can be achieved in the air squadrons, and I take note of what my right hon. Friend said. I assure him that we have much detailed work to do yet, and that I shall ensure that his views are fed in.

I understand the views and feelings of the hon. Member for Don Valley (Mr. Redmond) about RAF Finningley. He was good enough to bring a delegation to see me, and we had an interesting conversation. I listened carefully to what the delegation said and I assure the hon. Gentleman that our people will work closely with the local authorities to come up with what I hope will be the best solution for Finningley. I greatly regret that such historic stations are being caught up in the great sweep of change that is taking place, and I praise the hon. Gentleman for his vigorous fight to try to retain Finningley.

My hon. Friend the Member for Tynemouth (Mr. Trotter) was good enough to take the trouble to alert me this morning to some of the points that he intended to raise. If I may, I shall deal with some of them by correspondence. The findings of the board of inquiry into

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the tragic Chinook accident are still under consideration, and a summary of findings will be published in due course, but not until they have been carefully considered and the next of kin informed. My hon. Friend also mentioned ALFENS--the automated low flying planning enquiry and notification system. Again, I shall write to him about that. He then talked about separation and stability, both of which are matters that exercise us greatly. He also referred to the Bett report, and I hope that he will feel that I have already dealt with that. Of course, I wholly endorse the tribute that he paid to the Royal Air Force.

As usual, the hon. and learned Member for Fife, North-East (Mr. Campbell) made an extremely good and well-informed speech. As the Member of Parliament for Leuchars, he knows a great deal about the RAF. I endorse the tribute that he paid to the work and the report of Sir Peter Cazalet. The hon. and learned Gentleman's speech was knowledgeable, and what he said about the role that the RAF would play in the event of a withdrawal from Bosnia is most important. I take all his points about the essential balance on civilianisation, concerning the need to get it right and not to go too far. Indeed, I wholly endorse all the views that he expressed on that subject. I shall write to him about the changing tactics that have evolved since the Gulf war.

As one would expect, my hon. Friend the Member for Tayside, North (Mr. Walker) paid a warm tribute to the Royal Air Force. Understandably, he has concerns about the defence costs studies. I shall leave his questions about procurement matters to my right hon. Friend, but plainly I take to heart what he said about RAF training. He is a commissioned RAF officer and I note what he said. He believes that there are high risks, and plainly it is true that we take risks with some of those decisions. I am grateful for the support of my hon. Friend on low flying, and it is extremely good that people are prepared to put their money where their mouths are. I noted also my hon. Friend's remarks about Bett and overstretch.

The hon. Member for Wentworth (Mr. Hardy) made an extremely well-informed speech--as one would expect from a former RAF service man--as did my hon. Friend the Member for Ruislip-Northwood. I noted my hon. Friend's warm tribute to the Poles and the Czechs, and I agree. Other hon. Members made distinguished contributions to this debate with which, I am afraid, I do not have time to deal. It was a pleasure, however, to welcome those members of the Select Committee who managed to come back in time. I was glad that they got here. The RAF faces huge challenges, as it has done in the past. We are supremely conscious that we owe the RAF a great debt of gratitude, and we will continue to support it in every way we can. The nation can be proud that it has such a splendid RAF.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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Water Charges (South-West)

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Lightbown.]

10 pm

Mr. Matthew Taylor (Truro): This is the fifth occasion on which Ministers have been forced to the House to respond to a Liberal Democrat- initiated debate on the water bills crisis in the south-west. Ministers have been required to respond to debates so often--despite their promises of reviews, consultations and even action--because the problem of unaffordable bills is still with us in the south-west.

In the previous Adjournment debate which I obtained on this matter more than a year ago, I said that residents in the South West Water area were being hit by a crisis, and were struggling to pay the highest water bills in England and Wales. The average bill for the region for that year was £304. The problem has not gone away, and the average bill is now £322, with many customers--often pensioners--having to meet bills of £600 or £700.

Nor has the anger in the south-west subsided. In March this year, the chair of the South West Water consumers committee, Jessica Thomas, reported that her office had been deluged with calls from dismayed South West Water customers who had expected cuts in their bills following Government statements. She said:

"We have had more angry and abusive calls in the last fortnight than at any time since our office opened."

Ministers have developed three excuses for the problem. First, they say that they could not have predicted it, either at the time of privatisation or when they set higher standards for the clean-up. Secondly, it is not their fault, and it is down to Ofwat to take action or to Europe. Thirdly, they are reviewing matters, and we should pay now in the hope that things will be sorted out next year. I call the latter the "never-never land" excuse.

Let us take each of those excuses in turn, starting with the first. The Government were warned about this. On 8 December 1988--during the final stages of water privatisation--I told the House:

"I represent an area where people are on low incomes, where some villages do not yet have their own sewerage systems and where many beaches are polluted. It is they who will have to foot the bill for the improvements that are required."

I also warned that both future British Government funding and much European funding would be cut off following privatisation, a statement which has been confirmed subsequently by the European Commission. I continued:

"I hope that the Minister can assure the people of Cornwall that they will not be expected to meet all the cost of cleaning up the beaches, which are used by citizens of the United Kingdom and Europe, purely because the Government, by their ideological approach, are cutting off the potential to obtain money in other ways."--[ Official Report , 8 December 1988; Vol. 143, c. 535-536.]

Yet none of the Conservative Members in the region--who are now wringing their hands as they lose votes due to rising water bills--joined me in opposing the Water Act 1989. By February 1989, the proposed increase for South West Water customers was 13.1 per cent in a single year. Such was my concern that I then sought and got an Easter Adjournment debate on water and servicing in the south-west. That was more than six years ago, yet Ministers now say that they could not see the problem coming.

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With the Conservative Government refusing to help, further increases in bills inevitably followed, as night follows day. After all, just 3 per cent. of the national population--those living in the south-west--are being forced to pay for more than 30 per cent. of the national coastal clean-up.

In July 1990, I initiated a further Adjournment debate, after a new Government announcement that they were bringing forward the clean-up programme dramatically, which saw much the same response. They were bringing forward extra requirements on the water companies, but they were not increasing the so-called "green dowry" allowed to companies at the time of privatisation to meet some of the costs of the environmental obligations on them.

The 1990 proposals came not from Europe, but from the then Minister responsible for the environment, Mr. Chris Patten, who is perhaps fortunate to be Governor of Hong Kong rather than having any role in Devon and Cornwall, where he might get an even worse reception than the one that he is getting out in Hong Kong. He estimated the cost at £1.5 billion. The real cost of his initiative proved to be £6 billion.

That brings me to the second excuse--that it is someone else's fault, particularly Europe's. Not only is it a fact that European standards could be set only with the agreement of British Ministers, who had a right to veto them, but the British Government decided to increase and speed up the clean-up in 1990, and to do so without proper costings, or any financial support for those areas that would be hardest hit.

In 1989, the European Community had proposed the municipal waste water treatment directive--precursor to what is now the urban waste water directive--but it was not agreed by the EC until 1991. In 1990, the United Kingdom Government not only brought forward the beach clean-up, but jumped the gun on the municipal waste water treatment proposals by unilaterally adopting them for immediate application. I stress again that they did so without offering any financial support for the area to be hardest hit--the south-west.

That fact, which Conservative Members, especially those in the south-west, have denied--that it was their initiative that was at fault, not that of the EC--is confirmed by the fourth report of the Select Committee on the Environment, which was published in December 1990. Although I have brought it to the attention of the House before, I have never had any response.

In the introduction to its response to the Select Committee, the Department stated:

"the Government decided to press its own review to a conclusion and not to await the results of the committees' deliberations . . . In March the Government announced a major change of policy to require higher standards of treatment before sewage is discharged to sea. The Secretary of State for the Environment said that in future all significant discharges of sewage to sea should first be treated at a sewage treatment works: the additional cost associated with this change was put at around £1.5 billion".

That was a wild under-estimate, as we now know.

I must re-emphasise that it was a Government decision, not a European one. Indeed, the introduction to the response to the Select Committee concluded:

"Government policies in this area are in advance of Community environmental policy development as contained in the draft EC Directive on Municipal Waste Water Treatment which is currently the

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subject of negotiation. This Directive if adopted will establish uniform minimum standards throughout the EC. The Government strongly supports this draft Directive and is working towards its early adoption."

In other words, they were pushing Europe to bring the directive forward as fast as possible, and we know the results for South West Water consumers.

I do not criticise the environmental objectives, but I do criticise those who seek to escape the Government's responsibility for those decisions, and those who failed to foresee the impact on South West Water consumers.

Yet, while the Conservative Government set the standard, they insisted that the customers should meet the costs. The Minister who replied to the 1990 Adjournment debate concluded:

"It is much better for private companies to raise money from charges to customers. The Government apply that system generally, and Cornwall will be no exception."--[ Official Report , 16 July 1990; Vol. 176, c. 842.]

Well, we were not. As a result, the Director General of Water Services announced that South West Water bills would increase, not at 6.5 per cent. a year over inflation as planned after privatisation, but 11.5 per cent. plus inflation each year.

The fact that prices have doubled in the past five years is, in every way, the Government's responsibility. Not surprisingly, the result was big advances for the Liberal Democrats in the general election in the south- west. The Western Morning News reported: "MPs returning to Westminster after the election have spoken of widespread anger and concern on the doorstep over soaring water bills."

One of the beneficiaries of that anger, my hon. Friend the newly elected Member for North Cornwall (Mr. Tyler), pressed the matter in another Adjournment debate at the beginning of June 1992. By that stage, Conservative Members were belatedly backing our concern, but the Secretary of State remained dismissive, describing South West Water's rising charges as

"good value to a household".--[ Official Report , 2 June 1992;Vol. 208, c. 805.]

That view is not prevalent among those who must pay those charges. When I raised the issue with the Prime Minister on 4 March the following year, he wrongly argued that I would find that water prices

"are similar in other counties to those in the west country."--[ Official Report , 4 March 1993; Vol. 220, c. 451.].

The message about the scale of the problem had not got outside the west country, but it did so as a result of the angry reaction to what the Prime Minister had said on people's television screens at Prime Minister's Questions, which many people in the west country had seen in the ensuing news programmes, which gave the figures and revealed that he was simply wrong.

Following that outcry, the Prime Minister gave a more positive response when I questioned him a week later. He said:

"I am examining the matter with the Secretary of State for the Environment."--[ Official Report , 11 March 1993; Vol. 220,c. 1105.] That was the start of the third excuse--that something might be done, but, to adapt a phrase as we approach VE day, "don't know where, don't know when". It was not so much an excuse as a muddle.

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By April, the Prime Minister was writing to Conservative Members to tell them that there were "difficulties" in bringing down bills. Meanwhile, the Environment Minister disclaimed responsibility, arguing in a letter to south-west Liberal Democrats on 27 April: "Responsibility for water charges rests with the Director General of Water Services";

and denying that they were considering a review of water prices. He even refused to meet to discuss the issue.

The Director General of Ofwat, Ian Byatt, was reported at almost the same time--on 7 May 1993--as confirming that

"only the Government can stop South West Water bills spiralling . . . He said price limits were based on environmental obligations laid down by the Government, and he had little room for manoeuvre." Last April, the constant delays, excuses and confusion from Ministers led me once again to try to get a proper response from the Minister in another Adjournment debate. Since then, the Government have developed another excuse--excuse No. 4-- that action has been taken, the problem has been resolved, and the rise in bills has been capped. No sooner was the excuse made than it too began to unravel. A year on, even Conservative Members admit that the crisis continues, as one west country Conservative Member said within the past couple of weeks.

First, we are told that the Secretary of State accepted advice from Conservative Members that only a substantial cash injection into the south- west coastal clean-up--a second "green dowry"--would bring bills down to the national average. That is the position that we have argued all along, yet we are told, in the words of the Western Morning News on 13 March this year:

"his request for £100 million from the Treasury last year was turned down flat".

As a result, bills are not being cut and they continue to rise. Conservative Members in the region, and even the Secretary of State, accept that yearly bills of £600 or £700 with no relief for pensioners, or those on low incomes or living alone, are literally unaffordable. Many bills are already at that level.

Secondly, unable to offer a cut in bills, the Minister cut the clean-up programme, to slow the rate of increase. That, however, does nothing to cut bills. It does not tackle the fundamental problem, which is that they have already been allowed to get too high. Even that policy has begun to unravel, because the NRA has overturned the Minister's ruling and said that substantial parts of the schemes must, after all, still go ahead, with the extra costs to the consumers still to be calculated. In any case, South West Water is challenging the price increase limits imposed on it, and I am advised that it may well win the case. What will Ministers do then, given that bills are already unaffordable?

Thirdly, in an extraordinary decision, sneaked out just before Easter, Ministers announced that water bills would still be calculated according to the out-of-date rates system--a system abandoned in the 1980s for local government because it was judged out of date and unfair.

Liberal Democrats and many water companies have suggested using the council tax system to calculate water bills, so that, even if bills could not be cut, they might be based on modern valuations, and help offered to those living alone or on low incomes. If rates were judged unfair and outdated for council use in the 1980s, how can that system be acceptable to Conservatives for calculating water charges in the 1990s?

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Finally, it emerged that, this year, Ofwat would cut bills for business and the minority of customers with meters, by increasing the bills of everyone else--the vast majority--well above the inflation rate, yet again. Worse still, the same principle could mean different charges for ordinary customers who are cheap to supply--those in cities--at the expense of rural customers.

On 22 March, Western Morning News reported:

"Water consumers in remote and rural areas of the South West could soon be facing even higher bills because they are more expensive to supply."

The newspaper revealed that, on the basis of Ian Byatt's comments, the water regulator--frankly, he raises economics to a fine art, but he does little to meet the needs of the consumers who are on the receiving end-- Labour-controlled Plymouth city council was prepared to bring a test case, demanding lower charges in the city on the basis that it was cheaper to supply, like large businesses. That would mean higher bills for rural customers.

The Labour chairman of the city's housing committee, John Coyle, confirmed:

"We are investigating the legal position. The early indications look like we will be able to go forward with a case to bring down water bills for every city resident."

Ofwat admits that such a challenge would be "a difficult case". If water tariffs were broken down between urban and rural groups, it would provoke outrage in areas where bills were forced up--the rural areas that have already been hit. Ofwat's south-west consumers' representative, Jessica Thomas, said that she was extremely worried at any moves that would hit rural customers.

Conservative policies have hit people in the rural south-west in many ways. Our schools are allowed £100 per child less than the average for England, and business gets less support than in any other region, despite high unemployment and low wages, but water bills are the most clear-cut example of unfairness. The Conservative party is reaping the reward it deserves: electoral defeat after electoral defeat.

At the general election, rising water bills meant Liberal Democrat gains. They delivered us victories in the county elections, and helped us to win our first European seats. Tonight, as the early local government results come in, it is clear that the Conservative party is losing over and over again in the south-west local elections.

The Minister has to answer the following questions. Why did the Treasury refuse to cut water bills, despite the Conservatives' own Secretary of State for the Environment asking for £100 million to do that? What will the Conservative Government do if the NRA requires the clean-up to go ahead, as it has, and South West Water possibly wins its appeal on the price cap and bills start to shoot up again? What does the Minister say to customers without meters--the majority--whose bills have gone up well above inflation again this year, despite Government promises, while big businesses have had their bills cut? Will the Conservatives just stand by if Ofwat allows those living in the cities to have their bills cut at the expense of higher bills for customers in rural Cornwall and Devon?

If the Minister cannot answer those questions, he cannot expect Conservative fortunes to revive. He should expect a rout of the Conservative party, once again, come the general election.

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10.18 pm

The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): I thought that the hon. Member for Truro (Mr. Taylor) was going to go on for so long that I would not get a word in.

The hon. Gentleman has attempted to prove himself the knight in shining armour, but that posture is rather misplaced. The people who have been working in the south-west are my right hon. Friend the Member for Honiton (Sir P. Emery), my hon. Friends the Members for Teignbridge (Mr. Nicholls), for Cornwall, South-East (Mr. Hicks), for Torridge and Devon, West (Miss Nicholson), for Exeter (Sir J. Hannam), for South Hams (Mr. Steen), for St. Ives (Mr. Harris), for Plymouth, Drake (Dame J. Fookes), for Plymouth, Sutton (Mr. Streeter), for Taunton (Mr. Nicholson), for Tiverton (Mrs. Browning), for Falmouth and Camborne (Mr. Coe) and for Torbay (Mr. Allason), just to mention the key players.

They have striven-- [Interruption.] --perhaps the hon. Member for Truro (Mr. Taylor) would listen, bearing in mind that I have sat quietly and listened to his version of the story--for a balance of better standards, which we definitely need in the region, and for the keeping down of costs in the long term.

Even the hon. Gentleman will accept that, after years of neglect under the previous Labour Administration, a massive programme of capital investment was required to modernise and upgrade the water and sewerage infrastructure in the region. That need would have arisen regardless of whether the industry had remained in the private sector or was privatised, and it would have been reflected to some degree in the water charges.

However, what water privatisation has done--the hon. Gentleman will be unable to reflect on that because he will not even see it--is to allow the companies access to the financial markets, which has helped South West Water to fund its investment programme. South West Water has made enormous strides in improving the infrastructure in the first four years.

About 400 individual schemes, totalling £760 million, have been completed. In 1992-93 and 1993-94, investment was running at £200 million a year. In the six months to 30 December 1994, a further £78 million was invested; 50 major schemes were completed, 377 were on-going. They were all the type of schemes that had been demanded by the Conservatives and by the Liberal Democrats in the region. The company has borrowed extensively to finance that programme and, at 31 March 1994, loans and financial obligations amounted to an enormous £507 million. That means that financing was predominantly through loans, which spread the costs over time to the customers. Even the hon. Member for Truro must accept that that huge capital programme, by enabling better water quality and higher environmental standards, has removed 100 restrictions on commercial and residential development. That has meant a dramatic increase in the customer base, and by that I mean an increase in industry and households in the region. It has helped the economy in the region and it has spread the tax base and the cost base. For instance, in 1993-94, there was an increase of 5,000 customers for South West Water. The overall economic benefit to the region has also meant, as I have said, an increase in the spread of the financial load.

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