§ Mr. Peter Temple-Morris (Leominster)
I am very grateful for this opportunity to raise the most important question, as far as Herefordshire is concerned, of our domestic rate support grant as well as the water supply to our county, and, indeed, to deal with the matter not only from the point of view of Herefordshire but also Hereford and Worcester overall.
I am also pleased that the Minister of State himself is here to reply. To put him at ease straight away, let me say that I know and he knows that I shall have the pleasure of welcoming him to Shobdon next Sunday, and it might be said that the hospitality of Herefordshire will go beyond anything he says tonight. He can be assured of a reasonable welcome in Shobdon, in spite of whatever reply he makes, though I hope it will be favourable and enhance the welcome which Shobdon and North Herefordshire will give him.
In setting the scene, the first thing to be said is that, while the subject of this debate is referred to as "water supply to Hereford and Worcester", and while it has the support of all five Hereford and Worcester Members of Parliament, I am primarily speaking for Herefordshire itself, and particularly for my constituents in North Herefordshire, as part of the old county. To narrow it down to water terms, it becomes the old Wye River Authority area, which has now become part of the Welsh National Water Development Authority.
The fact that I have the backing not only—and particularly—of my hon. Friend the Member for Hereford (Mr. Shepherd) but also of the Worcester Members of Parliament—who do not, if I may say so, have quite such a bad situation to deal with as we do in Herefordshire, because they benefit from the Severn Trent Water Authority rates—is a 737 measure of their concern for the unity of our new county, and they are supporting me very much in this.
Before coming specifically to the subject of water, perhaps I may mention the importance of this Adjournment debate to North Herefordshire and my own constituency. It is very considerable. Although the Minister has special responsibility for water, he is also prominent in the Department which is responsible for local government reorganisation. It is not fully appreciated in this House—and, with respect, I do not think that it is fully appreciated in the Department, either—that there are very strong feelings in Herefordshire about its recent merger with Worcestershire. This is not party political, and I appreciate that my right hon. and hon. Friends bear responsibility for local government reorganisation. The Minister and I have had this out on the Floor of the House before. But if the Minister and his right hon. and hon. Friends had been in power at the relevant time, they, too, would have reorganised local government, albeit in a slightly different way.
At present, over a large number of areas, there is in Herefordshire a certain despair about the way that it is losing out generally over water, not only generally compared with Wales but specifically compared with Worcestershire, in the working out of the merger between the two counties. There is already, born this week, a Herefordshire Survival Campaign. There is in the post at this moment a letter to every Member of Parliament. There is considerable pressure upon all of us—the representatives of Herefordshire and the relevant Ministries—not only over this issue but over such issues as the Hereford College of Education and its survival, because again there is the threat that it will disappear in favour of Worcestershire. All this is exacerbated by the water rate situation, where again we come off worst.
Perhaps I may turn now to describe the area which I represent, as does my hon. Friend the Member for Hereford, who I see in his place. It is a rural area, bearing many similarities to Wales. It is a low-wage area. It is an area which has suffered and is suffering considerably from de-population. It has many retired and many old people. It has had 738 a traumatic local government reorganisation and a water reorganisation. In addition, it needs industry desperately. In competing for all these, it has none of the advantages of Wales. It is sandwiched between Birmingham's industrial area and Wales. We have none of the advantages, and are left behind, out of both. Furthermore, in terms of water, we suffer by not having the same domestic rate support as Wales—a point which I shall come to in a moment.
As for the rates generally—I appreciate that this is a national problem—in 1974–75 the rates in my constituency went up by a maximum of 115 per cent. In 1975–76, they are up by about 50 per cent. again. As for the water rate, which is a very strong component in this, in 1973–74, before water reorganisation, grossing up the water rate and taking the relevant parts of local government expenditure which went towards water, it was 7p in total. In 1974–75, it went up to 13.8p. In 1975–76, it went up to 16p. Next door, with the large Severn-Trent authority, we find in 1974–75 a rate of 3.6p, going up to the marvellous total of 5.6p this year. These areas are sitting not only side by side but are part of the same local government area.
I say to the Minister—his Department has responsibility for this—that it is crucial, if this is to work, that Worcestershire and Herefordshire should be given a reasonable chance of combination. But, contrasting them, we find Worcestershire, which has the same relief as we do—the English relief—also has an English water authority, the Severn-Trent. We have Welsh water, and we have even a split district council situation, with Leominster district divided between the two old counties of Hereford and Worcestershire. Its Tenbury or Worcestershire area has a general rate of 62.48p in the pound.
The Leominster area, which is part of the same district, has a rate of 72.88p. The cause is the difference of 5.6p water rate of the Severn-Trent Water Authority and the 16p Welsh water rate. Malvern Hills has a 10p difference and is another district split between the two councils. I received a letter which mentioned two houses at Holly Bush, near Ledbury, sitting on the border, which are owned by the same person. One house is on one side of the old border and the other 739 is on the other side. Their water is piped from the same source, but one pays£7 water rate and the other£17.50. Anything more asinine than that or any greater case for overall equalisation I cannot think of or mention.
As to the two focal points of Hereford and Worcester cities, Hereford has a general rate of 78.44p but Worcester has a general rate of just 60p. This is because the city of Hereford has suffered the equalisation policy of the Welsh Water Authority without any of the benefits by way of domestic rate support which go to Wales. The net result has been that the general service charge for Hereford has increased this year by 444 per cent. Therefore, the rates for the smaller, more dependent and more vulnerable county of Herefordshire average 10p in the pound more than rates for Worcester. If this new authority is to work, we must give it a reasonable chance.
I should like to deal specifically with domestic relief. As the Minister knows, we are talking about 33½p in 1974–75, increasing to 36p in the pound for Wales for 1975–76. The figure for the rest of England is 13p, increasing to 18p in the pound. I know that the differentials have narrowed by the magnificent sum of 3p. As I am sure the Minister appreciates, this is a small amount when we are dealing with the total. It is difficult for people in these areas to comprehend the rationality of this—I confess that I find it difficult also—but the effect is that in 1974–75 the Welsh rates actually reduced by 5.1 per cent. on average. Our rates were up by 80 per cent., 90 per cent. or 115 per cent. In an article published in a Montgomeryshire paper last year it appeared that Montgomeryshire was almost embarrassed, because it receives the full benefit of the Severn-Trent Water Authority and the full benfit of the Welsh relief. That, as an anomaly, is one of the best examples we can find.
I do not want to anticipate the arguments of the Minister tonight. I am sure that he will have much to tell us. Certain specific arguments are advanced on this matter with which I want to deal. First, in giving Wales its increased domestic relief, water is only one factor among others. Perhaps I may quote the 740 Secretary of State in his excellent report 1975–76 on the rate support grants when, in dealing with the Welsh rate support grant, he said it wasin recognition of the particularly severe impact on much of the Principality of the reorganisation of local government and the water services.Exactly the same applies to us. We have had as traumatic a reorganisation as any Welsh county. I came from Wales and I know Wales as well as anyone. We have had just as bad an experience as Wales has, not only from local government reorganisation but from the reorganisation of water.
We are told that if some benefit were given to Herefordshire it would create a series of anomalies elsewhere. Where? Part of Cornwall is involved, and also a small part of Gloucestershire. If there is a case to be made out, I am sure that it could include Herefordshire rather than be used as an argument against Herefordshire. Just tell us where. That is my only question.
There is no exact parallel to us. We are an area which is part of a water authority, the principal part of a water authority area receiving extra rate support grant far and above that which we receive. One of the principal reasons is the expensive water which it pays for and, unfortunately, we pay for as well.
Next, it is said that this is positively the worst time to increase public expenditure. This I accept and acknowledge. The House has paid a lot of attention to that matter recently. One appreciates this, but one is dealing with extra relief which would cost less than£2 million as far as Herefordshire or that part of the Welsh National Water Development Authority are concerned. It is more of an adjustment than a simple increase, because it should have been dealt with in the first place. I would even go so far as to say that if we are so tight financially, surely, bearing in mind that we have so many of the same problems as Wales, it would not be too much to ask that if there was not a penny available, not even under£2 million when public expenditure is so high come what may, we might at least share with Wales, we being such a small proportion of it, that rate support relief which goes to that country for the same reason that we ourselves suffer from.
§ Mr. Colin Shepherd (Hereford)
Is my hon. Friend aware that for similar households in Cardiff and Hereford the actual amount of rates paid differs by the extra amount of rate support grant of which Wales is in receipt, which lends strength to his argument?
§ Mr. Temple-Morris
Indeed, it does. I am grateful to my hon. Friend. That brings me to my next point, and it follows up what he has said. It is said against us that the Welsh are now paying, despite the extra rate support, as much in rates as are the English. All I can do is to adopt what my hon. Friend has just said, and mention the fact that our neighbouring districts, Radnor and Monmouth, taking into account everything to do with water, were paying in 1974–75 half as much as us. As far as I know, there is no increase or decrease. It is about the same figure. The neighbouring counties down the road are paying about half as much. If one gave some glorious average figure for Wales it would not be sufficient for our area.
I want to make an appeal to the Minister of State on this question. I have the strong backing of my constituency and my area in this matter. I have the backing of my hon. Friend the Member for Hereford, of the old county of Hereford and the new county of Hereford and Worcester, and of the Welsh district councils and the district councils within our area. I say this with the deputy chairman of the Leominster District Council, Mr. David Joyce, sitting in the Public Gallery and listening to me as I speak. It is encouraging that while these benches may not be too full, at least it is a measure of support that he is here to listen to me.
§ Mr. Deputy Speaker (Mr. George Thomas)
Order. In this House we never recognise anyone except those who are hon. Members of the House.
§ Mr. Temple-Morris
I accept that, Mr. Deputy Speaker, and I apologise. It added a point that I should not have made.
I should like to mention briefly certain other specifics—briefly, because I have spoken for too long already and almost gone over my time. However, there are certain other matters which I would be grateful to the Minister for touching upon. One is equalisation. The Welsh autho- 742 rity has done it. Other water authorities have not. It is felt very strongly by rural areas that this is another example of the way that rural areas suffer as compared with towns, which because of their massive rate revenues in comparison to us, are able to sustain much lower water rates. There is great dissatisfaction over representation on our water authority, and I think that this is common with other water authorities. They are too large for effective democratic representation. Something must be done about this, and at least it must be considered.
The quality of supply is something which very much affects us. I realise that there are reasons for these cut-backs. Broomy Hill has been postponed due to cut-backs and all the rest of it. The fact remains, however, that I have a petition with me which has been presented on behalf of the parishes of the Pyons with Birley to the Department last year. Mr. John Cleaver, who sponsored that, has been without water for at least 15 days this year, which is more than he was without water last year.
There is a huge loan debt which adds to the water rate and, as far as I know, there is no sign from the Ministry that it will give water authorities a greater flexibility to raise money at lower rates of interest. I could go on, but I shall not. There are other problems, such as eligibility for the resource element and the "unconnected to sewerage" argument. There are 16,000 domestic hereditaments in Leominster, of which only 6,700 are connected to the mains.
Why can we not give local councils overall responsibilities for emptying septic tanks and let them do the whole thing, so as to end an argument which will increase rather than decrease. The argument comes back to rate support and the sheer unfairness for Herefordshire, being so close to Wales and sharing their water but not their rate support.
§ 12.12 a.m.
§ The Minister of State, Department of the Environment (Mr. Denis Howell)
The hon. Member for Leominster (Mr. Temple-Morris) has put his case extremely attractively, as he always does. He preceded it by even more attractively assuring me of a warm welcome in his constituency on Sunday when I shall be on one of my sporting visits. I am sorry 743 that the disappointing answer I am about to give will be a prelude to that visit, but I am delighted to know, from what he said, that that will in no way reflect on the hospitality and the welcome I shall receive.
The hon. Member honestly told us that he knew that the reorganisation about which he is complaining, of water and local government, was imposed on the people of this country by his own side. He sought to mitigate that by saying that he thought we would have had a reorganisation. He is right. We would have done, but the differences would not have been as marginal as he told us, but would have been major differences, because we were not proposing to have a divided responsibility for local government imposed on us. We were in favour of unitary authorities, and that is a different kettle of fish from the situation in which we find ourselves, which has led the ratepayers into a state of great consternation.
I advised the House, in company with you, Mr. Deputy Speaker, when you were not in a neutral position, to oppose water reorganisation and local government reorganisation for the very reason about which the hon. Gentleman has been speaking. The consequences were clear to us before the Act was passed by the previous Conservative administration.
I am rather startled at the hon. Gentle-mans asking me to deal with the consequences, which we foresaw, of an Act which hon. Members opposite or their predecessors voted for. I am even more astonished when he tells me that his pleas have the backing of all the Worcestershire MPs. We are in this intolerable mess precisely because the right hon. Member for Worcester (Mr. Walker) was the man who imposed this nonsense on the country.
§ Mr. Temple-Morris
If the Minister foresaw the problem so clearly, we should be most interested to know how, now he is in power, he will deal with it.
§ Mr. Howell
I cannot adequately answer that unless the hon. Member assures me that when we come to deal with it we shall have the support of his right hon. and hon. Friends in unscrambling the egg.
744 I do not want to spend more time dealing with the consequences of the Act because I have great sympathy with the hon. Member and appreciate the hardship it is imposing on Herefordshire and parts of Worcestershire. The Water Act 1973 took the management of water services out of the hands of local authorities entirely. It made them self-financing operations.
What the Conservative Government did—and I never cease to be amazed—was to create 10 separate nationalised industries, nine in this country and one in Wales, and take them out of local government. They also divorced water charging from general rate policy. As a result, each water authority is, under statute, a totally independent authority. Ministers have no power to intervene in their pricing policy, and they are managed just like the gas and electricity boards. They are now totally independent of the democratic procedures of which the hon. Gentleman spoke. It is for each water authority to decide what charges are needed to carry out its obligations.
The authorities vary. Their debt burden varies. One of the reasons why there is a considerable difference in pricing policy is that the loan charges inherited by the Welsh National Water Development Authority, for example, are very different from those of the Severn-Trent authority or the North-West authority. Therefore, we do not have the powers to do what the hon. Gentleman asks us to do.
The hon. Gentleman asked me to say something about equalisation. My right hon. Friend the Secretary of State advised all the water authorities to go easy on equalisation, because we knew that in a precipitate equalisation policy, although some people were likely to benefit, many people would have considerable additional burdens imposed on them at a difficult economic time. But we have no power to instruct the authorities.
I am glad to say that the regional water authorities in England acceded to our advice. But the Welsh are a very independent people, as you well know, Mr. Deputy Speaker, and they decided to go for full equalisation in one year, which has added considerably to the burdens of parts of Hereford and Worcester. However, I am told—although this is little comfort to the hon. Gentleman—that the effect of that traumatic equalisation on 745 Hereford and Worcester, outside the city of Hereford itself, is less than in many parts of Wales.
There is the difficulty that Hereford and Worcester have their water rates determined by a Welsh authority, whereas parts of Wales, including Montgomeryshire, have them determined by an English authority, the Severn-Trent authority, because one of the principles of the Water Act is that water is now managed on a hydrological, geographical basis.
It is true that rate equalisation affects large parts of the South-West, not just Cornwall but Cheshire. I have received deputations led by Conservative hon. Members about the effects on parts of Cheshire of the Welsh authority's policy, making the very point that the hon. Gentleman made, that in parts of Cheshire people are having to pay those charges without having the rate support of people just over the boundary.
I looked into the matter carefully to see whether it was possible to give differential rating assistance in England. There are most formidable difficulties. I have had to reach the conclusion that it is impossible for us to proceed down the road of differential policies in England as between one county and another or, as in the case of Cheshire, one part of a county and another. When special relief was given in Wales for one year, 1974–75, whilst the effect of water reorganisation was a significant factor, there were others that were equally compelling, particularly the overall effect of local government reorganisation in Wales, which in the Government's judgment had more financial impact there than in England.
We cannot help the water charges through rates because the previous Government, when they established the Water Act, took the water service out of local government and away from the possibility of rate relief. Water charges are nothing to do with the general rating system, although, for convenience, many water authorities still have their charges collected by local authorities and base them on the rating system.
The hon. Gentleman asked what we intended to do about this matter. This 746 policy was supported by his hon. Friends. The Chancellor has made it clear that there can be no question of further general subsidies for nationalised industries. They must stand on their own feet financially. I understand that is also the policy of the Opposition. Therefore, there can be no question of more Treasury subvention to the new water industry.
We are just as unhappy at the consequences of this policy as the hon. Gentleman. Our difficulty is: what period should we allow to run before looking at it? There has been a tremendous upheaval in both local government and the water undertakings. The Government have said that they will allow a period of two years for this system to settle down before looking at the consequences. In all conscience I do not think we could have a shorter period. Those two years are nearly up and we are preparing for that review. We welcome what the hon. Gentleman said and will take his points into account when we come to review what, if anything, can be done about general water policy. There may be difficulties.
We must look at water policy in two ways: first, nationally, and, secondly, in the way that it is administered in the regions. I have a great deal of sympathy with the hon. Gentleman's point about the fantastic size of the regional water authorities. They are based on the hydrological principle. For example, the area covered by the Severn-Trent Water Authority starts in mid-Wales, goes right across the industrial Midlands to the East Midlands and finishes near Lincoln. In terms of democratic accountability or management, that is nonsense. However, that is the result of taking the hydrological concept to its utter logical conclusion. We want to look at and consider whether that is right or wrong.
I assure the hon. Gentleman—
§ The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to Standing Order.
§ Adjourned at twenty-three minutes past Twelve o'clock.