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Water Charges

Volume 173: debated on Wednesday 6 June 1990

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To ask the Secretary of State for Scotland what information he has on the percentage increases in Scotland on the community water charge between 1989–90 and 1990–91.

The average personal community water charge has risen by less than 9 per cent.

The Minister must know that as the community water charge is not rebatable, the figure that he has announced amounts to quite an additional burden, especially on people with low incomes. As it is estimated that £1·25 billion will be required to improve water quality to meet the regulations, the community water charge looks set to become a crippling burden on families unless the Government do more to help local authorities. What proposals do the Government have to match the capital debt write-off for and the dowry given to the water companies in England and Wales before privatisation? Will the Government give the same help to Scottish local authorities? If they do not, Scottish families, businesses and communities look set to be crippled by high water charges throughout the 1990s.

The cash injections into eight of the 10 water authorities in England and Wales were part of the capital restructuring before privatisation which the hon. Gentleman knows is not happening in Scotland. The Scottish Office is considering the implications for Scotland. However, I stress that water charges are very much lower in Scotland than they are south of the border. The average household in Scotland pays just over £41 per year for water, whereas in England the figure is £64. Similarly, much more is paid per head south of the border for sewerage than is paid in Scotland. The hon. Gentleman knows that there are special circumstances in Shetland because of the negotiations over the Sullom Voe terminal, but, as Shetland has the lowest community charge in Scotland and Orkney the second lowest, the whole picture must be taken into account.

Will my hon. Friend bear in mind not only the domestic water charge payer, but the business water charge payer in areas such as Grampian, which last year had a dramatic increase in its water charges? When we see debts being written off for the English water boards, there is obviously anxiety among high water users, such as the food-processing and paper-making industries, that they cannot compete on level terms with similar industries south of the border because of the water charges that they must pay.

There is a general desire for harmonisation. However, I stress that the non-domestic water rate for premises that are not connected to a metered water supply is levied in Scotland according to a proportion of the net annual value. That proportion is determined by the water authority and ranges from 100 per cent. to 12·5 per cent., depending on the type of premises. In general, we are seeking harmonisation.

Does the Minister accept that there is a feeling that the charges have been held low in anticipation of the regional elections? Does he further accept that one of the anomalies of this matter, as with the poll tax, is that the charges are not income related? If the Secretary of State is looking to remove anomalies, what proposals is he putting before the Cabinet to make the poll tax and the water charge tax income related?

I must stress to the hon. Gentleman again that water charges in Scotland are much lower than those south of the border. I consider that that is a satisfactory position. There are many more difficulties with business rate payers who have to pay more in Scotland. We are trying to harmonise as quickly as practicable.

Income is taken into account in the rebate system, and a considerable number of people are exempt from water charges. Full-time students are entitled to an 80 per cent. rebate. People are exempt from personal community water charges if their premises do not receive a public water supply. Any person listed in the schedule to the Abolition of Domestic Rates Etc. (Scotland) Act 1987 who is exempt from the personal community charge is also exempt from the community water charge. That includes the severely mentally impaired and long-term and residential care home patients.

Will my hon. Friend confirm that the water charge is use related and that if we could relate any form of local authority expenditure to use, we would not need a standard licence fee for the use of local authority services, which is the equity that the community charge represents?

I thank that I can explain to my hon. and learned Friend that water charges depend on a variety of factors such as the cost of treating and supplying the water, the amount of pumping facilities, the level of capital debt and the method of apportionment between classes of consumer. All those matters can vary among local authorities in Scotland and in fact do.