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Water Authorities (Privatisation)

Volume 100: debated on Wednesday 25 June 1986

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asked the Secretary of State for the Environment if he is now in a position to state when he plans the conversion of the Thames water authority into a water supply public limited company; and if he will make a statement.


asked the Secretary of State for the Environment what progress he has made with plans to privatise the water authorities.

The Government intend to introduce legislation to restructure the 10 water authorities in England and Wales as water service public limited companies. They will then be floated when market conditions and the circumstances of the individual companies allow.

I thank my right hon. Friend for that reply. Will he use the intervening period to make it crystal clear that the 25 per cent. of the population who already get their water from private companies are not suffering deprivation, sewerage trouble, high prices, and all the other nonsense that is put about by the Opposition parties and the trade unions?

I agree entirely with my hon. Friend. He is right to draw attention to the position of the 28 statutory water companies, which supply about one quarter of the water in England and Wales, including large cities such as Newcastle and Bristol. The companies operate to the same tight legislative requirements as the water authorities on the purity of drinking water, and so on. They have an excellent record in maintaining standards of all kinds.

Is my right hon. Friend aware that the Thames water authority is ready, willing and, indeed, eager to become a public limited company and to do so on terms that will be favourable for both employees and customers? Can he confirm that the legislation that he will introduce will enable Thames to be privatised as soon as it wishes without necessarily having to wait until the other nine authorities are ready to go forward?

I agree with what my hon. Friend says about the Thames water authority. It is encouraging that there is competition from a number of water authorities to be first into the private sector. There is a reluctance also, I think, to be last into it. The order in which it will be right for the authorities to go into the private sector will depend on the state of readiness at the time.

Does the Secretary of State agree that the policy involves selling off the ownership and control of the River Thames from Teddington to Cirencester and Tewkesbury? Does he recall that in the debate on Monday his hon. Friend the Minister for Housing, Urban Affairs and Construction confirmed that the Government would welcome private overseas capital in a shareholding of that river? Will the right hon. Gentleman tell the House the maximum proportion that he envisages will be permitted to private capital? Is not the idea of the sale of the River Thames or any other river in the country to private ownership entirely against the views of the majority of people of this country?

I must correct the hon. Gentleman, in that Tewkesbury is in the Severn catchment area, although Cirencester is in the Thames catchment area. I must correct him also in another, more important, respect. I see no objection whatsoever to the import of capital into this country. Many of our industries rely on imported capital and many of our jobs rely on capital which we have exported overseas. I do not take the narrow, blinkered attitude that the hon. Gentleman takes to the free flow of capital in world markets.

Has not the Secretary of State just confirmed that the French could actually buy the North-West water authority and the Thames water authority, and that the British people could buy not only their energy but their water from the French? Does he really believe that the British people want that? Will he confirm that the so-called private water authorities are merely franchising companies which sell water which they get from the existing publicly owned water authorities and that not one of them is responsible for pollution or sewerage matters, in which there is no profit? If the water authorities are privatised, will the country not suffer as a result?

The hon. Gentleman knows that in many privatisations the Government have thought it appropriate to take a golden share to control the degree of foreign ownership. When the House considers the matter, we can discuss the pros and cons of such a policy on water. It is not something that can be taken away. It is not possible to close down the North-West water authority. I feel that the problem is nothing like as important as the Opposition seem to be majoring on.

It is true that private water companies do not perform the entire functions of the water cycle, but the functions that they do perform—I think the hon. Gentleman will accept this—are of a first-class standard.

Will my right hon. Friend have a word with his right hon. Friend the Secretary of State for Transport and ensure that he knows what will happen to the chairman of British Rail if he does not change his mind about the sale of French water on all British Rail trains? It is impossible to get English water on British Rail trains, except for cleaning one's teeth on the night train, which the chairman of British Rail said that it is the only thing that it is good for.

My hon. Friend invites me to talk to my former self, which is a temptation I must now resist. I suggest that it might be advantageous if we could get Malvern water on SNCF.

In view of the right hon. Gentleman's reply to the question about the speed with which some water authorities will be privatised, will be tell the House how charges will he levied on domestic consumers when the water authorities are in the private sector? If there is to be a delay in metering or initiating other services, will he agree to the private sector using the rating system to collect charges from domestic consumers?

The private sector has been charging customers for water for centuries in those areas where water is still under private control. There have been remarkably few complaints or questions asked about that practice. I do not see why that should not continue.

First, I take this opportunity to congratulate the right hon. Gentleman on his appointment to his important office. We are aware that behind his well-known eccentricities of view lies a fairly shrewed political brain. As he has referred to his tendency to talk to himself, I should advise him that many people in local government fervently hope that he will go on doing that, and leave them alone.

As for the right hon. Gentleman's proposals to privatise Britain's water resources, I remind him that even his own eccentricities cannot cover the fact that the Government are proposing to hand over water consumers to private enterprise monopolies without competition or choice. A rip-off of the taxpayers' assets is likely to be followed by a rip-off of water consumers. How can the right hon. Gentleman, of all people, possibly justify that?

I am grateful to the hon. Gentleman for his welcome to my sitting in this position. I can reciprocate by saying how pleased I am to find him sitting in his position, on the Opposition. and I hope that he will remain there for a very long time.

I am fascinated that in my new post I am to have the label "eccentric". I am used to having labels of one sort or another, so I say in gratitude to the hon. Gentleman that this one is much more acceptable than some I have had.

The hon. Gentleman has left out of account the fact that many companies have performed infinitely better in the private sector. I can compare this with British Telecom, where privatisation of what was nearly a natural monopoly has taken place. One cannot meet anyone who does not now remark how greatly improved telephone services are.