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Severn-Trent Water Authority

Volume 892: debated on Friday 23 May 1975

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2.0 p.m.

Some weeks ago a Conservative Front Bench spokesman said that the Conservative Party's slogan was now to be "Small is beautiful". I must say that in view of the Conservatives' record in office I find that statement astonishing. Of course, I would agree that smallness in a business or organisation by no means necessarily involves inefficiency, while it is sometimes the case that bigness can bring remoteness and inefficiency. But whatever might be the attitude of some members of the Conservative Party now, certainly the actions of the last Conservative Government have brought us enormous problems, with which we are now wrestling and which are the direct consequence of their liking for reorganisation on a large scale.

One of the reorganisations on a grand scale carried out by the last Conservative Government involved the transference of the control of water supply and sewage treatment and disposal facilities from local authorities to 10 regional water authorities in England and Wales, under the Water Act 1973. That Act spawned the huge Severn-Trent Water Authority, which is responsible for not only the management of our water resources in the hydrological basins of the Trent and the Severn but for the local water supplies and sewage treatment and disposal facilities in the vast area stretching from Wales to the coast of the East Midlands.

In that area water supply and general services charges have varied from locality to locality because of the historical differences in the charges levied by the Severn-Trent Authority's predecessor undertakings. It is now the proposal of the authority to equalise charges over the whole of this vast area within the next five years. I want to show how monstrously unfair that proposal is.

Several times recently the equalisation policies of regional water authorities throughout the country have been raised in the House, but in the Severn-Trent area we have circumstances which are unique. The mighty West Midlands conurbation which my hon. Friend the Minister of State, Department of the Environment, knows so well, is unique in the British Isles in that it straddles the watershed between two catchments. It takes a great deal of water from the Severn catchment and puts it out as effluent into the Trent catchment. One river—the Severn—is the principal water supply of the conurbation, while the other—the Trent—is its effluent disposal river. Thus, man's activities over the last 150 years have linked the two rivers and led to gross abuse of our natural water resources.

The Trent itself is a clean river, until it begins to receive discharges from the potteries, until it is grossly, horribly and disgustingly polluted by the poisonous industrial effluent and the unsatisfactory sewage effluent which come from the potteries and the West Midland conurbation.

Five years ago in the House, after a visit to the area, I pointed out that the sewage treatment facilities over much of the Black Country presented a disturbing picture of decades of neglect. These facilities are totally inadequate to deal with the sewage of the present population. It will cost astronomical sums of money to bring many of these truly Victorian facilities up to modern standards. Five years ago I saw with astonishment and disgust the horrible pollution of the River Tame, the filthiest river in Europe. It is the main drainage channel for almost the whole of Birmingham and the Black Country, and it disgorges its putrid mess into the Trent about eight miles upstream of Burton-on-Trent.

Just as it is true to say that millions of pounds are required to modernise the sewage treatment and disposal facilities of the West Midlands, so it is true to say that the control of the discharge of poisonous industrial waste into rivers in the West Midlands lags far behind the arrangements which have been made in the East Midlands.

Thus, the East Midlands has long been the recipient of the filth of the West Midlands, and it would be disastrously and outrageously unjust if by means of the equalisation charges now proposed by the Severn-Trent Authority, the East Midlands, which has managed so well its own affairs in this field, had now to pay to put right the neglect of decades in the West Midlands.

I cannot speak for the whole of the East Midlands, but I believe that just as in Nottingham—where we have always made adequate provision for the supply of water, for sewage facilites and the removal of effluent, and always paid appropriate, fair and adequate charges for those services—so the East Midlands as a whole has managed its arrangements in this field in a way markedly more successful than has the West Midlands.

Already under the terms of the Water Act, the domestic ratepayer in the East Midlands is paying more in his water and sewage charges, and under the proposal of the Severn-Trent Water Authority, he will pay much more yet to put right that astonishing neglect in the West Midlands of which I have spoken.

A similar story can be told on the trade effluent side. There is no justification for common charges to apply when totally different industrial effluent problems are involved, when the poisonous waste materials poured into the waterways of the West Midlands contrast so sharply with the comparatively innocuous trade effluent of the East Midlands, and when there has been such a difference in the past provision of facilities as between the East Midlands and the West Midlands.

As the important textile industry and other industries in Nottingham have expanded, so have sewers been provided and plants for the treatment of effluent improved. Industry has paid its full and proper share of the costs. I have never heard anyone suggest otherwise.

We have industries providing employment and making a worthwhile contribution to the economy, and using vast quantities of water as a basic material, while meeting the cost of the water used and of its subsequent treatment. That water has not for a long time come from the Trent, because that river—our river, as we think of it—has been for so long poisoned by the filth of the West Midlands. So water has had to be pumped, for industrial and residential requirements, from the bunter sandstone, to the detriment of the environment.

An example of this detrimental effect is that much of the Sherwood Forest area is incapable of supporting hardwood trees now because the water table has been lowered to such an extent. The Dover Beck, which once ran with sufficient vigour to operate textile machines, is now reduced to a mere trickle of drainage water. Thus, we have seen not only our river poisoned but our environment changed, because of the failure of the West Midlands to manage its water arrangements in the progressive and responsible way in which we have attempted to manage ours in the East Midlands.

So now, for the people of the East Midlands, who have put up with all this for so long, comes the threat of the equalisation proposals of the Severn-Trent Water Authority, under which they will pay huge sums of money to put right what the West Midlands should have been paying to do for scores of years. Now we are to have the strong possibility that the dyeing and bleaching industry will be brought to a halt, and undoubtedly the competitiveness of the textile industry in general, with all its current problems, will be further reduced. These are the bitter consequences of the 1973 Water Act which I and my hon. Friend the Minister of State fought and voted against in Committee.

Some weeks ago, as my hon. Friend will remember, I took a delegation from the Nottingham Chamber of Commerce and Industry to talk to him about these proposed changes. It was somewhat ironic that it was he whom we had to meet, for he was the leader of the Labour side on the Standing Committee dealing with the Water Bill in 1973. In those Committee proceedings he very clearly predicted what would happen, and what is now happening. At the meeting of the delegation he listened with sympathy and understanding to what we said, but pointed out that under the terms of the Water Act he had no power to intervene in the decisions of the water authorities on the level of charges which they levy, and that he was therefore in no position to explain or to justify the increased charges proposed by the Severn-Trent Water Authority. He said that already he had had discussions with the water authorities about the need to keep down their costs as much as possible, and that he had urged the water authorities to avoid any sudden increases in the structure of charges which could result in severe increases for particular groups of customers. In the light of this he suggested that representatives of the industries of Nottinghamshire should have further discussions with the Severn/Trent authority about trade effluent charges.

The Nottingham Chamber of Commerce and Industry took that advice and sent a delegation to see officers of the Severn-Trent authority, and about that time the authority issued its charging notice to firms, making it clear that appeals against the charges had to be notified to the Secretary of State within two months of the issue of the notice The charges to the East Midlands industries for the removal and treatment of effluent would be increased under these proposals fivefold over the next five years—a swingeing imposition on industry. In the discussions which ensued, the officers of the Severn-Trent authority would not go beyond agreeing that appeals could be lodged within three years instead of two months, without detriment to the appellants.

I point out to my hon. Friend that the industries of Nottinghamshire are willing to continue a truly meaningful dialogue with the Severn-Trent authority rather than go through the trauma of an appeal, but they have nevertheless decided to lodge appeals because it appears that a worthwhile dialogue is not possible. They have made it clear that the lodging of the appeals should be regarded as a protective measure, and that if the Severn-Trent authority is willing to continue discussions with a view to securing a mutually acceptable arrangement, the appeals may be withdrawn.

I appreciate that the upheaval of yet another change in the water industry, coming quickly after the last upheaval involved as a result of the Act, would bring chaos and confusion, but I hope that in the light of my hon. Friend's experience and in the light of what he said in Committee when we dealt with the Bill, in the not too distant future there will be amendments to the Water Act which will bring the right kinds of improvement, and which, particularly, will enable the Minister to have what he lacks now—the power to have something to say about the way in which charges are imposed by the water authorities.

I hope that when my hon. Friend replies he will be able to say that this is to be considered. I hope very much also that he will agree to approach the Severn-Trent Water Authority to say that he feels that the East Midlands has a strong case, and that he would expect the Severn-Trent authority to respond to the strength of that case by beginning talks with industry, and with any local authority which is aggrieved, designed to bring justice to the East Midlands.

I repeat that what is being proposed by the Severn-Trent Water Authority is monstrously unjust.

2.18 p.m.

I am glad to have the opportunity, first of all, to pay tribute to my hon. Friend the Member for Nottingham, North (Mr. Whitlock) who, as he has told the House, was a strong supporter of the line that I took when the Water Bill came before the House, and played a very full part in the deliberations on it. I especially express my appreciation of his acknowledgment today of the fact that many of these great difficulties now being faced as a result of the Water Act were specifically predicted by both of us and by other Members on the Committee.

There has been reorganisation on a giant scale. I have not the time to associate this reorganisation with that of the local government reorganisation simultaneously carried out, but, as my hon. Friend said, if the whole of local government is reorganised, and also the whole of the water industry in this country, it is bound to be a very costly exercise. Ratepayers and water consumers are finding out exactly how right we were at the time to make these forecasts, and to regret the tremendous financial imposition which would have to be endured.

It is also true that one of the special reasons for our prediction was the gigantic size of the Severn-Trent Water Authority that was to be established. As my hon. Friend said—Mr. Deputy Speaker will know this well—this authority starts in Wales and stretches from the Welsh border land right across the country to near Lincoln, and in terms of democratic control this is an absolute nonsense. I do not wonder that so many people have no idea who are the people serving on this body, how they can make representations to them, and how they can get any redress of their grievances.

The principle of the Act is that the authority is based on the hydrological cycle. What happens now is that the rain falls in Wales—I hope in plentiful supply. It is then transported across the whole of England, being used on the way several times by the citizens living in the centre of England. It is finally discharged into the North Sea. 'That is the fate of our beautiful supply of delightful Welsh water. Whatever democratic procedures we have, it is necessary that we understand this hydrological cycle.

It is equally true, as my hon. Friend said, that when the previous Conservative administration introduced their Bill, another feature which was predictable was that authorities and citizens who had paid previously either to provide themselves with excellent supplies of water or, very sensibly and civilised, with efficient means of treating sewage and other discharges, were bound to have to pay again to provide them for those authorities and people who had not previously done so.

I concede at once the case put forward by my hon. Friend on behalf of his constituents. The East Midlands and Nottingham, in the former Trent River Authority, had a record probably better than anywhere else in the country in cleaning up sewage and other discharges and putting a reasonably wholesome discharge into the River Trent. Because there is tremendous pollution in the Black Country areas, they are to that extent having now to pay again for the job which should have been done years ago in those other parts of England.

The same applies in respect of water. I know that this is felt strongly in my own constituency in Birmingham which, in partnership with our Welsh friends in mid-Wales, had made a mammoth investment in mid-Wales to provide a wonderful supply of drinking water. Now Birmingham is being asked to pay again to supply the capital resources to meet the needs of those areas and those citizens who previously had not been so far-seeing about their own requirements. I must say that that was the main justification for the Bill introduced by the previous Conservative Government.

To the extent that my hon. Friend has made the case about what he feels to be the unfair nature of these additional financial burdens and about the pollution in parts of the West Midlands, the Black Country and the Potteries, we see the measure of the need to tackle these problems. I emphasise that we cannot tackle them on the cheap. They have to be paid for again, and my hon. Friend is right that I and my right hon. Friend the Secretary of State have no powers to interfere directly in such matters as the differential charges which my hon. Friend suggested.

My hon. Friend was saying that we should have the power to tell the Severn-Trent Water Authority that it should have differential charges for the treatment of sewage in the East Midlands from those applied in the West Midlands. Carrying that logic further, if that were to be activated on a national basis—and we have always thought that it should be—presumably some distinction would have to be made between one region and another. I cannot hold out any hope of that. As my hon. Friend knows, I have not the powers to move in that direction.

Despite the great difficulties and despite our criticisms, we decided when we came to office that we would let the present system run for two years. After all this upheaval, it would be a traumatic experience if we proceeded immediately to have another one right on top of it. In my view, ratepayers are justifiably concerned about the cost of all the reorganisation which has been imposed upon them. Therefore, it seems to make sense to have a period of two years during which all this can settle down. Then we can take stock of what has been happening about water.

I have some figures which may be of general interest to the House. We have often wondered what the cost of this reorganisation has been. I can tell the House what the additional administrative cost has been for the Severn-Trent. Evidence is now coming forward that the cost of the reorganisation itself has meant an additional 8 per cent. on the average water bill. Although everyone complains about the high cost of water, that is brought about not only by that 8 per cent. addition but also by an increase of 21·5 per cent. in the general wage bill of the water industry and a 14·5 per cent. additional burden in terms of debt repayment and high interest charges.

The average domestic bill for England and Wales in 1975–76 is made up of £14·42 for water and £13·81 for general services—a total of £28·23. In the Severn-Trent area, the respective figures are £1248 for water and £1386 for general services, making a total of £26·34 which is slightly below the national average.

One feature to have come out of the information that we are now getting is that everywhere—and certainly in Nottingham, though to a lesser degree—the domestic user of water and sewerage services is subsidising the industrial user. It seems now to be emerging that industry is not paying the full economic cost for the treatment of its discharges, sewage, drainage, and so on. Therefore, to that extent, industry is being subsidised by the domestic user, and that is a matter of which Ministers will have to take account.

I appreciate the difficulties of Nottingham industrialists. My hon. Friend said that there would be some appeals. There are. We have already got some. But since we have to sit in an appellate jurisdiction, my hon. Friend will not expect me to comment on them. We shall have to make a decision at the end of the day. To that extent, the appeals are sub judice.

I welcome the fact that industry is talking to the Severn-Trent Authority and co-operating with it in the way that we urged. I am sure that the Severn-Trent Authority is well aware of the feelings of industrialists and is looking at different types of schemes which might be readily available. Ministers have said to authorities that, if they are moving towards the equalisation of charges, they should do so gently—over a five-year period at least—and that it would be quite wrong to impose full equalisation on the public at one go.

When the Conservative Government established these 10 regional water authorities, they established 10 independent nationalised industries—a remarkable feat, even for that Government. But it means that we have no power to interfere. However, in the two-year review, we shall take account of any representations that my hon. Friend or any other hon. Member cares to make to us on the matter.

The Severn-Trent Authority has said that it is moving, as it was advised to move by the Jukes Committee, into a situation where it wants equalisation over a five-year period but that it intends to give an 80 per cent. discount in the first year or two and to discuss with industry what should be done about years three, four and five. That seems a reasonable and co-operative approach. I am glad to know that Nottingham's industries are responding to it. I hope that it produces a reasonable degree of harmony, having regard to all the background difficulties, which I acknowledge fully.