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Repeal Of Water Charges Equalisation Act 1977

Volume 35: debated on Tuesday 18 January 1983

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I beg to move amendment No. 34, in page 6, line 32, at end insert—

'(c) that adequate arrangements have been made to ensure that non-metered water consumers pay reasonably comparable rates for their water supply.'.
I am sure that the amendment was expected by hon. Members on both sides of the House following our debate in Committee and the miserable response from the Under-Secretary of State for Wales.

Few people can deny that there is a sense of unfairness—not only in Wales but throughout Britain—about the system of charging for water supplies. That sense of unfairness has, as I am sure the Under-Secretary will willingly concede, reached the point of outrage in Wales. I gave figures in Committee that showed the wide disparity of water charges in Wales compared with the England and Wales average. It has been shown consistently that the charges for water in Wales have been about twice the average charge for England and Wales combined.

It is not only a question of being unfair to Welsh water consumers. If the system continues, it will be a threat to the water industry and the planning and sensible use of vital and essential natural resources. If there is a lesson to be learnt, it should be from the 1976 drought. There are occasions, and that was one, when we need to be able to transfer water from areas of plenty to areas of shortage. It was our experience then that if the drought had continued much longer the changes in the distribution of water to ensure that all parts of the United Kingdom had enough would have been considerable indeed.

If the free transfer is necessary—I believe and accept that it is—it depends upon a national policy. With the abolition of the National Water Council it is difficult to envisage how that will be achieved under the Government's proposals. It also depends upon cooperation between water authorities and on the good will of those who live in areas that have abundant water supplies. In Wales, that good will has been deliberately dissipated by the Government through their decision to abolish the Water Charges Equalisation Act 1977 and through the announcement by the Under-Secretary of State in Committee that the Government found it impossible to devise a fair equalisation scheme. As that good will is dissipated, so the threat to the free transfer of water grows.

I do not condone the recent action by a minority in Wales, but the Government have themselves to blame for many of the problems that are developing there. The Government have consistently, not only through the Welsh Office but through other Departments, admitted that there is a problem. The newly appointed Secretary of State told the Tory party conference in 1980 that he recognised the unfairness under the present charging system and that the Government intended to find a fairer scheme. Nothing has been done about that.

The Secretary of State for Wales told the Welsh Grand Committee in July 1979 that water authorities were an issue of major current concern in Wales. It was of such major current concern that even now, in 1983, the Government have not only managed to do nothing about the matter but have made the position infinitely worse. Not only have they failed to remedy the defects which they admit exist but they have made the position worse by clause 8, which repeals the Water Charges Equalisation Act 1977.

Many odd reasons are given as to why the Government can do nothing. Water is now apparently considered to be an industry. I shall argue that point, which may be theoretical, but both gas and electricity are considered as industries and we do not see the wide disparity of charges for those utilities that we do for water. If one took the opposite view and said that water was more of a service than an industry, one could equally say that we did not have the same wide disparity of charges between services such as the Post Office and British Telecommunications.

If it is the correct way of charging to ensure that, inside the boundaries of each water authority, water equalisation shall prevail, why is it wrong to have no system of equalisation across the boundaries between each water authority?

I admitted in Committee—I have said it many times —that when we introduced the Water Charges Equalisation Act 1977 we did not expect it to last for ever. We believed that its effects and the benefits that accrued to the Welsh water authority and to other authorities would wear off in time. However, the Act should be repealed only if the Secretary of State is satisfied that reasonably comparable rates are applied for non-metered water supplies. That is not an outrageous suggestion. British people, wherever they live, as equal citizens, should have largely equitable charges for essential services such as gas, electricity, postal services or water.

The present charges in Wales are far from reasonable and certainly far from comparable. That is not because of any inefficiency on the part of the Welsh water authority.

I notice that in Committee the Under-Secretary said that a new measure to equalise water charges would tend to encourage the wasteful use of resources and lead the water authorities to be less efficient than they would otherwise be.

The high charges for domestic consumers in Wales have nothing to do with any inefficiency by the Welsh water authority, but are due to the higher costs of distribution in Wales, which are a factor of geography and little or nothing else. That was something that came out very strongly in the report of the Daniel committee, set up by the previous Government, which led to the Water Equalisation Act.

Comments have been made on the problem in Wales. Welsh Members will be aware of the role played by Mr. Haydn Rees, who had been the chairman of the Welsh water authority and the man who had had considerable experience in local government and in public life in Wales. The last annual report issued by the Welsh water authority when Mr Rees was the chairman stated:
"As I have publicly stated on several occasions, whatever decision is reached I personally believe that sooner or later—and the sooner the better—our legislators will have to realise that the water services industry is the only important public utility service that does not have either a common base charge or an equalisation of charges. That this, the most important, civilised and civilising of all the public services should not have similar treatment is, I believe, unacceptable and inequitable to the people in the area in which we serve."
It is true that the present system of charging in Wales is inequitable; because it is inequitable, it is unacceptable.

It is no good the Under-Secretary or anyone else suggesting that there is no alternative. A variety of alternatives have been put forward at various times.

One alternative would have been to allow the Welsh water authority to charge more for the water which is exported. That was turned down by the Government. Another alternative would be a return to the principles, or something like them, of the Water Equalisation Act. That has been turned down by the Government. Another alternative would have been rebates. An amendment to that effect was tabled, but unfortunately was not called. The fourth alternative is a form of capital debt write-off.

It is not true that there are no alternatives. The alternatives may not be acceptable or pleasant to the Government, but there are ways if the Government were to try to meet what they genuinely accept to be a problem in Wales—the unacceptable and inequitable nature of water charges.

Despite all the crocodile tears of the Under-Secretary, I recall that in July 1979 the Secretary of State for Wales admitted in the Welsh Grand Committee that water charges in Wales were a major current problem. Nothing has been done by the Government.

The majority of the people in Wales are far more concerned with the level of charges than they are with the structure, and now find that a new quango has been devised in total contradiction to the Minister's views on quangos when he sat on Opposition Benches.

Not only has nothing been done by this Government, but nothing will be done for Wales and for water consumers in Wales as long as we have a Government of this persuasion. When we return to office, a Labour Government will remove this injustice. We will restore a water equalisation scheme so that water charges, like gas, electricity and the postal service, are broadly in line throughout the United Kingdom. By doing that, we shall deal fairly and justly not only with Welsh water consumers but with water consumers throughout the United Kingdom and at the same time safeguard the efficient use of the nation's water supply.

11.15 pm

I always like to follow the right hon. Member for Rhondda (Mr. Jones). I should like to ask what he will do if ever the Labour Party is returned to power. Although he indulged in a clear and specific condemnation of the negation enshrined in the clause, in that it destroys any residual legislation that would make for equalisation, he was unable to say that the next Labour Government will legislate for complete equalisation on water charges, at least throughout England and Wales.

I should like the right hon. Gentleman to give that assurance, because there has been speculation in the press and elsewhere that the Labour Party in England is trying to develop a policy to return the water service to local government. That would enable the water service to be maintained as part of the local government system and, therefore, subject to the rate support grant.

There have been other attempts within the Labour Party at some kind of regional policy, including the idea of elected regional tiers, I am not sure where that proposal now stands, but that would create another option whereby it might be possible to have democratically elected regional tiers of government that could take control of the water industry regionally. There could then be equitable redistribution of both water and its costs.

I advance those two propositions for the right hon. Member for Rhondda to think about, and if he wishes to intervene in my brief speech, I shall be happy to give way.

On Second Reading I tried to set out some of the options then available to the Government. Since then, we have had another negation—the announcement of nothing by the Secretaries of State for the Environment and for Wales, who have thrown the ball back to the Welsh water authority, the Severn/Trent water authority and the North-West water authority. If accepted, the amendment would open up a number of alternatives. As I have just said, it would return control of water to local government, therby ensuring that the water service could be subject to RSG as a form of redistribution of costs and benefits of supply.

Another option is complete equalisation. I am certain that the Under-Secretary of State for Wales is an avid viewer of the Welsh channel four. He will have seen on "Y Byd ar Bedwar", "The World on 4", the current affairs programme produced by HTV, the new chairman of the Welsh water authority declare in favour of equalisation. To the extent that he can indicate a policy option, he did so. He referred to the invidious position between different utilities, whereby there is almost complete equalisation among utility charges such as gas and electricity but no such equality between water charges. That clearly shows where he stands and where his authority would stand.

The attempt to secure a higher level of return from the Severn-Trent water authority and the North-West water authority was the only option available in the context of policy laid down by the Government. The failure of the Government to adjudicate clearly as between Severn-Trent water authority, the North-West water authority and the Welsh water authority, as they had a responsibility to do, and the throwing of the whole issue back to the Welsh water authority is an indication that the Government are prepared to do precisely what I alleged at Second Reading, to regard the different level of charge between Wales and the regions in England which are served from Welsh reservoirs as being legitimate and acceptable.

When the Prime Minister decides to call the election—no doubt it will be her decision and hers alone as in so many other things with this Government—thousands of Welsh consumers will respond by rejecting a party that is prepared to allow those inequitable differentials to remain.

The other option is to allow a commercial free-for-all in water transference. Many Welsh domestic consumers will have seen with interest the recent proposal to start exporting United Kingdom water to Arab countries at a commercial rate. The Welsh water authority and many consumers in Wales will have seen what the new market value of water is. If the Government are committed, as they are in most areas of their policy, to an out-and-out market value and ensuring a full commercial return, no doubt they will be prepared to allow the Welsh water authority, if it wishes, to go to the Severn-Trent water authority and demand the levels of water charges that are likely to be offered commercially by those who want to import water from the United Kingdom.

The fact that this amendment is likely to be rejected by the Government shows that they are not prepared to meet the real differential. They are prepared to tolerate a situation whereby Welsh consumers are unfairly exploited. For the historical, emotional and, indeed, justifiable reasons of community resentment that I set out on Second Reading, it is reprehensible that the Government should take this view.

It is as a direct result of Government policy that many consumers in Wales are either unable or unwilling to pay the inflated water charges. A community, or individuals, resort to forms of direct action only when it is apparent that a constitutional response on the part of Government is not forthcoming. It is regrettable in the view of the Government that people should resort to forms of direct action, including the withholding of payments. I take the view that when a Government who have no mandate in Wales and who clearly do not represent the interests of the majority of the Welsh people are not prepared to respond sympathetically—

Is the hon. Member seriously contending that if the views that he expresses are not immediately translated into action by the Government, even though his views are supported by an insignificant minority of the people in Wales, there is any justification whatever for breaking the law? If so, then he has to face up to the consequences that others may take it into their heads to defy legislation requiring the teaching of Welsh in schools, which is very much resented by the English majority in a great many regions. It is only because the people of Wales on the whole are law-abiding that there has been such progress in the teaching of Welsh in the schools.

I am aware that this is not a debate on the teaching of Welsh. However, one local authority in Wales is, I believe, in serious breach of the law and so far the Department responsible has not acted.

However, I understand from the figures made available that about 20,000 people in Wales have not paid their water bills this year in full. That shows that at least a significant proportion of the population feels strongly about the issue. I tried to say that of course there was in general an obligation on members of the community to abide by that community's laws. There is also an obligation on the authority in a community to be responsive towards minority demands. The test of a democracy—whether in the United Kingdom or anywhere else—is the extent to which it can maintain the will of the majority while ensuring that the rights of minority groups and regions are respected.

In that sense, the Government should reconsider their view. Otherwise, it will serve only further to alienate water consumers in Wales and will increase exploitation of Welsh resources by those regions outside Wales that take advantage of them. I do not want law-breaking campaigns to increase. However, when a Government refuse to respond to the demands of consumers and are unable to adjudicate in regional conflicts, minorities that feel hard-pressed by the level of wather charges will want to assert their position. It is not as if this is a new issue. It has been controversial for as long as I and most hon. Members can remember.

The issue is being scrutinised by the Welsh Affairs Committee. Those of us who are not members of that Committee regret that the report has not yet been forthcoming. It would not be in order to comment on that now, but press reports suggest that this is the result of a difference of opinion between Conservative and Opposition Members on the Committee. We assume that the Committee would adopt a slightly more critical line than the Welsh Office or its supporters are prepared to accept. As a member of another Select Committee, I regret that the deliberations of that Select Committee should be held back for that reason. The Select Committee's report was seen in Wales as an opportunity to scrutinise an area of policy and to make constructive recommendations for ending the conflict between domestic consumers and the regions outside Wales that take advantage of our water resources.

This issue will not go away. [Interruption.] Perhaps the Minister wishes to intervene. I see that he cannot take it. The issue of the water supply and natural resources in Wales and their use by outside regions, has been controversial for several years. Those domestic consumers who are unable or unwilling to pay the high water charges and the further increases likely next year, will not give up easily. They feel strongly about the way in which Welsh resources are exploited. I am sure that the Government are only creating opposition and increasing the determination of consumers in Wales to obtain justice.

Clearly, the Government will not accept the amendment. I can tell that by the expression on the Minister's face. However, if he rejects it, I hope that he will put forward cogent arguments to the Welsh electorate, telling us why we should continue to suffer such high charges.

The cogent argument, imposed on the Minister by the Secretary of State, and which he has been forced to use, is that there are 11 marginal seats in the area of the Severn-Trent authority. In an election year, that dominates the Government's thinking.

11.30 pm

I am sure that my hon. Friend is, in this case, as in many other cases—although perhaps not always—right. He has pointed out that political issues affect the Government's decisions. I do not want to anticipate what may emerge later this week, but Governments are sensitive on such matters whether they concern keeping open railway lines in marginal Welsh constituencies, or water supplies. Therefore, a marginally higher charge to the consumers of water in regions that take advantage of Welsh resources would be sufficient to persuade the Government not to equalise or to attempt to provide some recompense. That is another example of the way in which the Government treat Wales. They have disregarded Welsh opinion in their economic and social policies and are now doing so in their environmental and natural resources policies.

That is not surprising because the Government have no mandate in Wales and they are clearly prepared to sell the needs of Wales down the river, as it were. In this case it is down a river regulated by reservoirs built in Wales, the advantages of which accrue to consumers outside Wales.

We have recently seen another graphic instance of the way in which differential water charges operate in a border village between Clwyd and Cheshire. I congratulate those people who found themselves back in the area of the Cheshire water undertaking, and who therefore had cheaper water rates. However, I remind them that one day they will be back in Wales and we hope that that will be at a time when water rates between the north-west, Chester, and Wales are equalised so that they will not have to pay more.

I press the Minister to give some rational response and to set out what options he thinks the Welsh water authority can realistically take in its negotiations with the Severn/Trent and the North-West water authorities to try to obtain a more equitable level of charges and to ensure that the major consumers of Welsh water outside Wales make some recompense to lower the charges to non-metered water consumers in Wales.

I hope that the hon. Member for Cardigan (Mr. Howells) will join my hon. Friends in voting for the amendment. It is important that we should show the Welsh people that there are strongly held views on this and that the Government are deliberately resisting an attempt to bring equality to Welsh domestic water consumers.

I support what my right hon. Friend the Member for Rhondda (Mr. Jones) has said about this amendment. This is a deplorable Bill. We have come to it after the reorganisation in the Water Act 1973 by a Conservative Government, who I think it is now agreed did not do a good job on that occasion. I am pleased that my right hon. Friend said that it will be a high priority for the next Labour Government to amend the damage that the Bill will inflict on the British water industry. It is significant that a Water Act was rushed through the House in 1973, prior to the 1974 election, and now we shall have the 1983 Bill which might well lead to an election in 1983 or 1984.

The amendment relates to clause 8, which is one of the worst features of the Bill for Wales. The people of Wales would have wished the Government to address themselves to the injustice in the differentiation between the water charges in different parts of the United Kingdom. There is no justification for it. We are given no justification by the Government for those differences.

Under the Bill the regions are allowed to have a system of equalisation. Within the Welsh water authority the people in the urban areas pay towards the cost of distributing water to the country areas. However, because of the geology and demography of Wales there is an added cost in the distribution of water compared with, for example, the city of Birmingham, which is a comparatively small area where distribution costs are not great. Therefore, it is possible for the cost of distributions in one part of the United Kingdom to be far less than those in another part.

Britain does not have a system in which it costs more to post a letter in the country than from one part of London to another. The Government do not seem to realise the injustice of people being compelled to pay more for their water because they live in a certain part of the United Kingdom. Matters have been made worse. When the water industry was closely linked to local authorities, and people paid one rate that covered the local authority rate and the water rate, if they were in financial difficulties or had small means, that was taken into account, and they had a rebate that covered both water and local authority services. The present rating system is not just. The payment for services according to the size of one's property is something that a future Government will have to examine.

There is injustice in the present system under which the local authority and water rates have been separated. Elderly people who live in large properties are able to obtain a rate rebate from the local authority if their means are small. But they have no water rate rebate. It is not how much water is consumed in the house that determines the water rate; it is determined by the size of the house. One could have two houses of equal size, in one of which an elderly person of small means has to pay the same rate as the family next door with seven or eight earners.

The injustice is that this system varies between one part of the country and another. Wales has a large rainfall, and supplies water not only to Wales but over the border, but water is cheaper over the border. The Leader of the House is present. His is an area that benefits from this system. Why is it allowed? How can one justify the fact that the water that comes from Wales can be obtained by his constituents at far less cost than it can be by the people of Wales?

I do not agree with the hon. Member for Merioneth (Mr. Thomas) about taking the law into one's own hands. That is not the answer. The answer is in the ballot box, which will be available in the not-too-distant future. People must exercise their right to vote. If the Government will not address themselves to the serious problems of the water rates, as they are not doing in the Bill, we have to seek democratic ways to bring about democratic changes.

The hon. Gentleman rightly says that we shall soon have the ballot box as a means of expressing our opinion. If the Labour Party is elected at that election, can he give a pledge that it will achieve what the previous Labour Government did not achieve—equalisation of water charges?

My right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) has given certain commitments.

I should go further than equalisation. Water is an essential service. We did not have a local rate for the Falkland Islands expedition. The money came from taxation.

Increasingly there should be an Exchequer contribution to the water industry. It is increasingly through taxation that we should pay for our water service rather than by the iniquitous method of people paying according to the size of accommodation in which they live. It is scandalous that a family in a house where an additional room has been built should have to pay higher water rates. Instead of perpetuating the situation, the Government should accept this modest amendment. The Opposition tried in Committee to bring about more fundamental change.

Is the hon. Gentleman making a bid for the votes of the landlords in my constituency? I am sure that Lord Longford would be delighted to hear that he will be required to pay the same water charges as the tenant of a modest semi-detached council house.

If the hon. Gentleman had been listening, he would have heard me suggest that payment should be based on taxation. It would be payment from each according to his ability and to each according to his needs.

That is right. There should be a tax on wealth rather than a tax on the Welsh. This is a tax on the people of Wales. They have to pay more for water that comes from their area than people in other areas. I have no wish to quarrel with the people of Birmingham. Many Welsh people living in Birmingham moved there at the time of the last depression. Such a move cannot be made now because the depression even affects Birmingham. It is necessary to deal with the matter through the Exchequer. I hope that the next Labour Government will give it priority.

Unfortunately, the 1973 Act was a shambles. However, the view was taken that, following reorganisation, it would be impossible then to dig up the roots. That explains why there has been delay. The mistakes of the previous Conservative Government in local government, the Health Service and the water industry are known. Now that they have come back to their own problems, their answers are worse than the previous ones. Their solutions are worse than the problems themselves.

We should move to greater equalisation. Because of the recession, the Welsh water industry has lost £6 million. The sum of £3 million has been taken by the Government. It is no good Ministers saying that the Water Charges Equalisation Act did not achieve much. It might not have achieved as much as it should have done, but it has proved better than what is now happening.

I hope that the Government will agree to a concession to deal with an issue that is not a minority problem in Wales. It concerns the vast majority of people. There is deep anxiety in Wales which cuts across party political boundaries. People of all political persuasions cannot understand the injustice that has been imposed.

The hon. Gentleman said that he did not agree with the hon. Member for Merioneth (Mr Thomas) about equalisation charges. He said that he would go a little further. He suggested that he would go for greater equalisation. Will he clarify what he means by "greater equalisation"?

11.45 pm

Instead of equalising the existing rate between different regions in Wales and the rest of England, we should relate it to the tax that people pay. There is no boundary. One pays tax according to one's income. The Government should pay a greater contribution from their revenue. That form of equalisation would make a better and more just system than comparing the water rates paid in, for instance, the Severn/Trent area or the Thames area with other areas. We need to tackle the problem in a more fundamental way.

The hon. Gentleman is saying that the amount of money that is paid in the present form of water rates should be paid in local income tax, according to a person's income tax.

Yes. But will he follow it through? It would be strange if the money now paid in water rates were paid as an income tax, a poll tax, but the rates themselves remained on the old basis of rateable value. Would that not be a contradiction?

As I said earlier, we should look at the iniquitous rate system. The water rate and the local authority rate, which originally were one rate, have now been separated. The system was unjust before, but now it is even more unjust. There should be a check on local authority spending. We have to think again about the formula whereby the Exchequer makes a certain contribution and the local authority makes a contribution. People talk about abolishing local authority rates, but it is not easy.

The only argument for water rates is that if people pay for water it inhibits people from wasting it. That is not so. People have water on a meter. Whether or not they pay a water rate does not conserve water, unlike electricity, gas, or other forms of energy, where consumers pay a price to equate supply and demand, and make sure that they do not waste it. People can waste water and pay lower water rates than people who do not waste water. So that argument falls by the wayside.

Last winter people were deprived of water and could not use the toilets. That makes one realise how important water is. In my opinion, it should be made free, and if it were free, we should have to move away from the existing water rate system.

We must look at the matter in a more fundamental manner. Instead of doing that, the Government have made a fundamental mistake in removing the compensation that was introduced in an attempt to deal with the injustice between Wales and the other regions of the United Kingdom.

It is abundantly clear that there is no lack of variety of solutions to equalisation on the Opposition Benches. We have had a tremendous variety of solutions and clearly there is no unanimity on the Opposition Benches about which of the different solutions is most applicable. The pledge of the right hon. Member for Rhondda (Mr. Jones) that a future Labour Government will equalise does not sound convincing, especially if the amendment is the best attempt that the Opposition can make to date at achieving equalisation. It certainly represents an attempt at introducing back-door equalisation.

Clause 8 is intended to repeal the Water Charges Equalisation Act 1977. The scheme established by that Act was clearly the best scheme that the Labour Administration could devise. However, we must not forget that it was thoroughly unsatisfactory. In the third year of its operation it had the effect of moving the average bills of unmeasured consumers 42 per cent. further away from the national average.

Equalisation, by its very nature, must penalise some areas, and it could certainly inhibit efficiency and distort investment decisions. We do not believe that the answer lies in central Government setting the level of charges for non-metered water supply. A standard national price implies subsidy of some areas by others. Those who advocate subsidy must decide where it will end. Is it to end with water charges or will it extend to general rates?

The Government believe that the right solution—it is in the Bill—is for the Welsh water authority and the regional water authorities to keep their charges under control through greater efficiency. It has been alleged that we have done nothing, but we have changed the structure and organisation of the Welsh water authority to achieve the greater efficiency that we believe is the best means to reduce water rates and to keep the level of rates as low as we can.

What is the effect on individual domestic consumers of the alleged efficiency that the hon. Gentleman has established and what contribution has it made to reducing water charges and introducing greater equality between English regions and Wales?

The new authority came into existence as recently as 1 April 1982. It has barely had an opportunity to prove its mettle. We expect considerable progress to be made by the new business-like and compact authority that we have installed in Brecon. We expect rather greater financial gains by the new authority than would have been achieved had my right hon. Friend determined in favour of the Welsh water authority and against the Severn Trent and North-West water authorities.

We have made it clear during our debates that had my right hon. Friends decided in favour of the Welsh water authority and granted its claim in full against the other authorities, the effect would have been a reduction of £1 in the average Welsh domestic bill this year of £79.

I say to the hon. Members for Merioneth (Mr. Thomas) and Caernarvon (Mr. Wigley) that of course water is an emotional issue in Wales, but no one has done more than they have to stir up emotions and to encourage Welsh people not to pay their water bills. That means that an additional cost falls on those who pay their bills because money has to be borrowed by the Welsh water authority and the interest on that has to be paid by the consumers.

Let us put the matter into perspective. We acknowledge that water is an emotive issue in Wales. It is the most outworn cliché in our political vocabulary, but the fact is that we are not top of the league with regard to the average domestic bill. Two out of the 10 water authorities have higher average charges then we have. There are higher average charges in Anglia and the south-west region in the current year.

Does the Minister accept that if he and his colleagues had fought and won the battle to get the £4 million for Wales, albeit only £4 million, the ratepayers in Wales would have had a reduction this year as opposed to the increase that he says is happening because of the campaign that is being waged, minimal though that increase may be? Why did the Minister's Department take 15 months to reach the decision? When he said last year that the Government were willing to move away from the no-profit, no-loss conception, why does he now adhere to it? Will he admit that his Department has suffered defeat at the hands of the Department of the Environment?

The hon. Gentleman has not studied the decision and the way in which the decision was arrived at by my right hon. Friends. He will be aware that that was the first determination of its kind. He will be aware that a procedure had to be devised. He will be aware that my right hon. Friends could decide only upon the submission made to them by the Welsh water authority, as commented upon by the other two authorities. He should also be aware that an application was made by the new Welsh authority that came into operation last April to change and add to the submission that was made by its predecessor. That is why it took a certain amount of time to reach the decision.

I have stressed that my right hon. Friends could come to a decision only on the submission that was made to them. Therefore, there is no sense in which my right hon. Friends were defeated. I have said that the no-profit, no-loss principle has been operated by successive Governments in the past, including this Government. It is a clear principle, upon which my right hon. Friends decided to base their determination.

The prime purpose of the Bill is to allow water authorities to exercise better control over the management of their activities. That point has not been fully appreciated, even now, on Report.

Will the Minister tell the House and the people of Wales whether it is his view that people living in Wales should pay higher rates than people living in Birmingham and London?

12 midnight

It is clear that in practice the rates vary in different parts of the country. It is in the essence of the Bill to allow variable rates. I have explained that Wales is third from the top of the league. If the hon. Gentleman is asking whether I am happy with that position, I have made it clear that we were the first to go in for structural reorganisation to promote efficiency in the Welsh water authority. The hon. Gentleman should not forget that the authority has considerable business, with a revenue income of well over £150 million per year. We believe that the authority can be run more efficiently in the future, that savings can be achieved and that that is the way to keep charges to consumers down.

As I have said before, no one has come up with a scheme for the equalisation of water charges that does not in some way inhibit good cost control. The right hon. Member for Rhondda is delightfully vague in his amendment about what is "reasonably comparable". The amendment would completely nullify clause 8 and I must ask the House to reject it.

I have never heard such a nonsensical and ridiculous reply. In view of the stupid nature of the Minister's reply, I am so full of contempt that I shall not even bother to vote on the amendment.

Order. I was asking the right hon. Member for Rhondda (Mr. Jones) whether he wished to withdraw the amendment.

On a point of order, Mr. Deputy Speaker. Do we not have the right to vote on the motion before the House? We wish to vote in favour of the amendment.

As I do not have the agreement of the House, I shall have to put the question on the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 16, Noes 160.

Division No. 44]

[12 midnight

AYES

Bennett, Andrew (St'kp't N)Howells, Geraint
Campbell-Savours, DaleJohnston, Russell (Inverness)
Canavan, DennisOgden, Eric
Cryer, BobParry, Robert
Dixon, DonaldPowell, Raymond (Ogmore)
Hardy, PeterSkinner, Dennis
Home Robertson, JohnSpearing, Nigel

Steel, Rt Hon DavidTellers for the Ayes:
Whitehead, PhillipMr. D. E. Thomas and
Mr. Dafydd Wigley.

NOES

Alexander, RichardJoseph, Rt Hon Sir Keith
Ancram, MichaelKellett-Bowman, Mrs Elaine
Aspinwall, JackKing, Rt Hon Tom
Atkinson, David (B'm'th,E)Lamont, Norman
Baker, Nicholas (N Dorset)Lang, Ian
Banks, RobertLawson, Rt Hon Nigel
Beaumont-Dark, AnthonyLester, Jim (Beeston)
Bendall, VivianLloyd, Peter (Fareham)
Berry, Hon AnthonyLoveridge, John
Best, KeithLyell, Nicholas
Bevan, David GilroyMcCrindle, Robert
Biffen, Rt Hon JohnMacfarlane, Neil
Biggs-Davison, Sir JohnMacGregor, John
Blackburn, JohnMcNair-Wilson, M. (N'bury)
Blaker, PeterMarten, Rt Hon Neil
Boscawen, Hon RobertMates, Michael
Bottomley, Peter (W'wich W)Mather, Carol
Boyson, Dr RhodesMayhew, Patrick
Bright, GrahamMellor, David
Brinton, TimMeyer, Sir Anthony
Brittan, Rt. Hon. LeonMiller, Hal (B'grove)
Brooke, Hon PeterMills, Iain (Meriden)
Brown, Michael (Brigg & Sc'n)Moate, Roger
Browne, John (Winchester)Morrison, Hon P. (Chester)
Bruce-Gardyne, JohnMurphy, Christopher
Bryan, Sir PaulMyles, David
Butcher, JohnNeale, Gerrard
Carlisle, John (Luton West)Nelson, Anthony
Carlisle, Kenneth (Lincoln)Neubert, Michael
Channon, Rt. Hon. PaulOsborn, John
Churchill, W. S.Page, John (Harrow, West)
Clark, Sir W. (Croydon S)Page, Richard (SW Herts)
Clarke, Kenneth (Rushcliffe)Parkinson, Rt Hon Cecil
Clegg, Sir WalterPatten, John (Oxford)
Cockeram, EricPattie, Geoffrey
Cope, JohnPawsey, James
Dickens, GeoffreyPercival, Sir Ian
Dorrell, StephenPollock, Alexander
Douglas-Hamilton, Lord J.Proctor, K. Harvey
Dunn, Robert (Dartford)Renton, Tim
Durant, TonyRidley, Hon Nicholas
Eden, Rt Hon Sir JohnRoberts, M. (Cardiff NW)
Edwards, Rt Hon N. (P'broke)Roberts, Wyn (Conway)
Eyre, ReginaldRossi, Hugh
Fenner, Mrs PeggyRumbold, Mrs A. C. R.
Finsberg, GeoffreyShaw, Giles (Pudsey)
Fisher, Sir NigelShaw, Sir Michael (Scarb')
Fowler, Rt Hon NormanShelton, William (Streatham)
Fox, MarcusShepherd, Colin (Hereford)
Gardiner, George (Reigate)Shersby, Michael
Goodlad, AlastairSilvester, Fred
Gow, IanSmith, Sir Dudley
Gray, Rt Hon HamishSmith, Tim (Beaconsfield)
Greenway, HarrySpeller, Tony
Grieve, PercySpicer, Jim (West Dorset)
Griffiths, E. (B'y St. Edm'ds)Squire, Robin
Griffiths, Peter (Portsm'th N)Stainton, Keith
Grist, IanStanbrook, Ivor
Gummer, John SelwynStanley, John
Hamilton, Hon A.Stevens, Martin
Hampson, Dr KeithStewart, A. (E Renfrewshire)
Havers, Rt Hon Sir MichaelStewart, Ian (Hitchin)
Hawkins, Sir PaulStokes, John
Heddle, JohnStradling Thomas, J.
Henderson, BarryTaylor, Teddy (S'end E)
Heseltine, Rt Hon MichaelThomas, Rt Hon Peter
Hogg, Hon Douglas (Gr'th'm)Thompson, Donald
Hooson, TomThorne, Neil (Ilford South)
Howell, Ralph (N Norfolk)Trippier, David
Hunt, David (Wirral)Vaughan, Dr Gerard
Hunt, John (Ravensbourne)Viggers, Peter
Hurd, Rt Hon DouglasWaddington, David
Irvine, Rt Hon Bryant GodmanWaldegrave, Hon William
Jessel, TobyWalker, B. (Perth)
Jopling, Rt Hon MichaelWaller, Gary

Ward, JohnWolfson, Mark
Watson, JohnYoung, Sir George (Acton)
Wells, BowenYounger, Rt Hon George
Wells, John (Maidstone)
Wheeler, JohnTellers for the Noes:
Wilkinson, JohnMr. Tristan Garel-Jones and
Williams, D.(Montgomery)Mr. John Major.

Question accordingly negatived.

After that startling Division result, which clearly showed that the policy of the right hon. Member for Rhondda (Mr. Jones) does not command the full support of the Opposition, I hope that we can deal quickly with the next amendments.