HL Deb 07 July 1982 vol 432 cc788-96

3.56 p.m.

The Earl of Avon

My Lords, with the leave of the House, I shall now repeat a Statement being made by my right honourable friend the Minister for Local Government in the other place. The Statement reads as follows:

" With permission, Mr. Speaker, I would like to make a statement on the future organisation for water in England and Wales.

" The regional water authorities were set up in 1974 with large memberships, the majority of such members being appointed by local authorities in their areas. The original intention was that these members should represent the interests of consumers. There has for some time been concern that this system is not working as intended. Consumers have not felt that they were really represented and few people knew who their representatives were on the water authority. At the same time, large memberships have led to a proliferation of committees and bureaucracy and inhibited efficient decision-taking. The Monopolies and Mergers Commission, in its report on the Severn-Trent Water Authority, recommended that the present membership should be substantially reduced and not based predominantly on local government representation. The Welsh Water Authority has already been reconstituted on these lines. Earlier this year we issued a consultation paper for England on this question.

" The regional water authorities are substantial undertakings requiring a high level of management ability. Having considered the responses to the consultation paper, the Government have decided to create smaller boards of between nine and 15 members, appointed by Ministers and including executive members on every board. We propose that county and district councils should have the opportunity to nominate people for some appointments to these boards. In addition, land drainage and fishery interests will continue to be represented. Chairmen and members of the new boards will be paid, and will serve for fixed terms.

" Together with these new boards, improved arrangements can then be made for consultation with consumers, local authorities, and other interested parties. Water authorities have already established various kinds of liaison arrangements at divisional level, and we intend to build on these.

" Our proposal is that water authorities should appoint an advisory committee for each division, which would include representatives of local authorities, but also representatives of industrial, commercial and domestic consumers, and agricultural and amenity interests.

" We shall issue guidelines for the establishment of these committees, and will require the water authorities to satisfy us that proper arrangements have been made.

" In considering the structure of the water authorities we have also examined their relationship with the National Water Council. The National Water Council played a valuable role following re-organisation in assisting the new authorities and helping represent them to Government. They are now fully established and the Government have developed a more direct relationship with the individual authorities. The Government therefore believe that they are able to carry out their responsibilities without an additional central statutory body. We have therefore decided to dissolve the National Water Council. We shall be consulting those affected by this decision, including the trade unions. The Water Space Amenity Commission will also be dissolved.

" The legislation which will be required for these changes which cover both England and Wales will be introduced at the earliest opportunity.

" Mr. Speaker, we believe these proposals represent an improvement in the arrangements for the organisation of the water industry, and that they will command wide support both among consumers and in the water industry itself. I commend them to the House".

That concludes the Statement.

Baroness Birk

My Lords, I thank the Minister for repeating the Statement which has been made in another place. May I ask him why there was no parliamentary consultation before these, as we see it, reactionary proposals were put forward? Under the previous Conservative Government, when the new Water Act was passed which set up the National Water Council and many of the bodies which the Government are now undoing, there was the fullest consultation. When the last Labour Government discovered that the Act was not working adequately a consultation document was circulated, replies came in and a White Paper announcing proposals was published. But then came the general election. These proposals seem to have been shrouded in an amazing amount of secrecy.

What emerges from the Statement is that once again we are seeing the elimination of local democracy and its replacement by a watery corporate centralism which is answerable only to the Secretary of State. Will the Minister confirm that the local authorities which were consulted—although their response to the Government's proposals have not been published—were very much against the proposals? Is it not also a fact that they follow on the anger which was expressed at the last Conservative conference about the rising charges for water which made many of the delegates extremely annoyed? Will the Minister also confirm that nothing in the Statement will bring about a reduction in water charges? This is a very important question and I should like an answer to it. Although I readily agree that the make-up of the old water authorities was too many in number, may I ask the Minister why there is no place for local authorities on the new ones? Although we read in the Statement: We propose that county and district councils should have the opportunity to nominate people". there is no assurance there that they will be made members of the new boards. Why is there no place for them? And why, since a great deal is said about the interests of the consumer, is there no place for consumers on the water board? What we shall have will be advisory committees, which in the past have proved to be unsatisfactory. It is on the advisory committees that the consumers will be represented. Industrial and commercial users and other people who are very important to the water industry will also be represented on those committees.

With the dissolution of the National Water Council—" dissolution "is a rather curious word; I should have thought it would be better to use the word "abolition"—could the Minister tell me who will be dealing with the level of investment, who will be dealing with wage negotiations and who will be dealing with the quality of water, sewage treatment and pollution, all of which must be dealt with nationally? Who will deal, for example, with the problem of lead in water? I am sure that the Minister must be aware that the water quality survey which was published this year by the National Water Council and which covers pollution and all the other factors relating to the quality of water is unique. There is nothing like it anywhere else in the world. To whom can we now turn for national water control, pollution and all the other problems which were dealt with by the National Water Council? Finally, is this not, I repeat, a further erosion of local democracy which will not have the effect that the Minister stated he thought it would?

Baroness Seear

My Lords, while we wish to thank the Minister for repeating the Statement, we should like to say that we find very little in it to welcome, beyond the fact that the local boards will be smaller than the previous ones. That at least is a step in the right direction. The idea that these local boards should all be appointed by the Secretary of State, with no democratic control at all over them, seems to us a most retrograde step. Now that the water rate has been separated out from other rates and has grown enormously in the process, surely it would be possible to have a degree of direct election by the people who have to pay for the water to the bodies which control it. Following what was said by the noble Baroness, Lady Birk, I deeply regret that the Government have seen fit to set up yet more of these ineffective advisory committees and, in so doing, to keep the interests which are concerned with the operation of the water bodies off the decision-making bodies. Surely the consumers and the major industrial and union interests should be directly represented on the bodies which make the important decisions.

The Earl of Avon

My Lords, I appreciate the comments of both noble Baronesses. Where we slightly differ from them is that we feel that this is not working at the moment and that the elected representatives on the boards are not producing the results for the consumers that we should like. It is for that reason that we are making the change to the divisional level, the difficulty being, as the House is well aware, that the water authorities cover a different area from the local authorities. There is, therefore, disparity between the representatives, with the result that the representatives are not known.

The noble Baroness, Lady Birk, asked in particular whether there would be a reduction in the water charges. That is not a specific aim of these proposals but we hope that we are moving towards increased efficiency by having these smaller boards which will, we hope, improve the water charge position. So far as liaison at divisional level is concerned, we believe that this is the right place for it to be because that is where the consumer can go straight away and talk to people at his own level about water quality. We believe that is better.

The noble Baroness, Lady Birk, mentioned consultation. As I have already said, earlier this year we issued a consultation paper on this question for England, and as a result of the response this is what the Government have decided to do. As the noble Baroness rightly pointed out, the local authorities were not, on the whole, in agreement with this policy. In fact, I think the decision is not one which they like. However, there will continue to be some members with a local authority background on the boards. It is also intended that there shall be local authority members on the consultative committees which will be set up specifically to represent the interests of consumers, local authorities and others directly affected by water authority activities.

In the Government's view, there is no longer any need for a central statutory body and the council's functions of providing advice to Ministers and of providing a forum for the discussion of matters of common interest we believe can be best left to the water authorities themselves. We shall be consulting with the authorities about the other questions which the noble Baroness raised towards the end of her remarks.

Lord Taylor of Gryfe

My Lords we join with the spokesman from the Labour Party and also the spokesman from the Liberal Party who expressed their concern about this move and the fact that local democracy appears to be diminished by the development, in the interests of an anticipated but not proven efficiency. The abolition of the National Water Advisory Council is a matter which gives us some concern, because that was a clearing house for interests in this country which use water in the amenity and recreation field. There are conflicting interests in this field in the use of water by speedboats, anglers, or whatever. There is also a growing utilisation of water facilities for recreation, sailing, fishing, and so on. I would welcome some advice. While I support the idea that consumers are, perhaps, underrepresented in the new provisions, I would welcome some assurance from the Minister that the recreation and amenity interests, which are involved in the water business, are duly protected.

Baroness Seear

My Lords, may I ask the noble Earl, if he does not like the appointment—

Several noble Lords


The Earl of Avon

My Lords, perhaps the noble Baroness will just allow me to reply to the noble Lord. We are not hostile to local authorities in this. What we are trying to do is to ensure that local authorities carry out their duties effectively. However, we do not believe that water authorities, which are major industrial undertakings, are part of the local authorities' job. It is a closer relationship with the Government to the regional water authorities that enables us to take this step.

I may have misled the House when I replied to the noble Baroness, Lady Birk. I cannot quite remember what I said about the consultation paper. I should have said that having considered the responses, the Government decided to create a smaller board. I may have said something else in my earlier remarks.

Lord Nugent of Guildford

My Lords, is my noble friend Lord Avon aware that this is the first national utility which has been taken into Government control directly? Has he any basis for thinking that from a Government department it will be possible to direct the policies and management of this major national utility of water supply and water treatment better than under the independent constitution it has had for the past nine years? Can he give us any justification for that? Does he really think that he is going to make a better service by running it through civil servants and Ministers who have many other things to look after? This is the first question which the abolition of this national body poses.

Is my noble friend aware that in international circles, the structure of the water industry in this country and of water supply, and the management of rivers and water treatment, is regarded as the best in the world technologically? Does he really believe that he is going to improve on that? What justification does he have for making this major change? There is absolutely no precedent for it. Is he aware that the major criticism of the water industry is inevitably that water supply and water services cost more, but that is because, nowadays, consumers have to pay for what it does cost, whereas before part of it was wrapped up in the rate charges, which no longer carry it, with there being a large amount of Government subsidy being involved? Is he aware also of the general standard which has been achieved over the past nine years in bringing up the standard of water supply in this country and the security of it, and in improving the environmental standards, which has made outstanding progress, as the noble Baroness, Lady Birk, indicated? Is there really any justification for abolishing machinery which has brought all that about?

Does my noble friend really think that civil servants in his department are going to do all this better than the people who have been doing it for the past nine years? Has he any justification for this whatsoever?

Turning to the second barrel of the howitzer he has discharged at the House this afternoon, that he is abolishing local government representation on regional water authorities, does he really believe that local people are going to be happier because they have an advisory committee set up by him? Does he really believe that these will give more satisfaction than having local government representatives from all the local government bodies in the region? Does he really think so? Does he believe that this arrangement will better represent the interests of consumers? Is he not aware that consumer councils have never been satisfactory?

Lord Denham

My Lords—

Lord Nugent of Guildford

I can see my noble friend the Chief Whip getting restless, but he can sit down in comfort because I am going to continue asking my questions until I have finished.

Lord Denham

My Lords, if my noble friend will give way for just a minute, nobody respects his knowledge of this issue more than Members of your Lordships' House, but I think he is trespassing slightly on the rules which provide for brief comments and brief questions for elucidation.

Lord Nugent of Guildford

My Lords, if my noble friend Lord Denham will forgive me, I have not trespassed in any way on the matter of comment because I have not made any; I have asked nothing but questions. I agree that my noble friend Lord Avon has a formidable task to answer them all satisfactorily but these are questions which should be asked and should be answered. The first question I asked was: does my noble friend really think that putting the control of a major national utility in the hands of a Government department is going to give greater satisfaction? This is a major question to which my noble friend simply has not addressed himself. Will he please answer some of my questions now?

The Earl of Avon

My Lords, I am grateful to my noble friend for the kind way in which he put his questions. First I should like to say that the Government are well aware of the work which my noble friend has done in this field, particularly as chairman of the NWC. I would like to say that we look forward to absolutely no lowering of standards and shall try to maintain the same standards which he maintained. My noble friend asked several questions and most of them are paraphrased by the words, do we really think it is better? I must answer all his questions by saying, yes, the Government do think it is better, otherwise they would not be doing it.

Lord Peart

How do you know, really?

The Earl of Avon

My Lords, there are several reasons why we have decided to restructure the water authorities. I mentioned a number of them in the Statement. Perhaps I may return to the basic ones, which are the inappropriateness of having these huge boards which was drawn out by the Monopolies and Mergers Commission. There is also a need for tighter links between the Ministers and the water authorities themselves, which we believe can be good. There is a need to have executive members up front on the boards. They are responsible for key decision and will produce more efficiency. We want to get rid of some of the bureaucracy of the present arrangement, which is again exemplified in this report. Local authority members were intended to represent consumers, which we consider at the moment does not work. We wish to try to do it in the way we have put forward. I will indeed study the more specific questions asked by my noble friends, but I have tried to answer some of them.

Lord Davies of Leek

My Lords, were the Welsh Authority in discussion with the Government before this action, too, took place? Also, may I assume that democratically this House and another place will have an opportunity of debating this to the full and that agreement will come through the usual channels before this is implemented? Lastly, does the noble Earl the Minister really believe that the more we have smaller areas, the greater improvement there will be in what I concur is one of the finest water systems in the world? Is the noble Earl aware that there will be trouble in Wales unless there is proper discussion about their water supplies, because over the years no proper attention has been given to this problem?

The Earl of Avon

My Lords, I am always very nervous of any questions coming from Wales because I know they look after these matters very carefully. I said in my original Statement, and it is all I have on this at the moment, that the Welsh Water Authority has already been reconstituted along these lines. So far as further debate on this subject is concerned, that is a matter for the usual channels.

Lord Renton

My Lords will my noble friend answer two brief questions? First, can he give us a broad idea of the financial implication of this? Will public money be saved and will it be possible to produce water more cheaply? My other question is, is my noble friend aware that water does not always conveniently fall into administrative boundaries? With his smaller authorities, will it not be necessary to have some way of enabling adjoining authorities at any rate to "borrow" each others' water if necessary? Will there be any kind of liaison written into the statute?

The Earl of Avon

My Lords, with regard to the first question, we are not doing this exercise in any way to save money by cutting staff or anything like that, although there will probably be one or two savings in this field. We are really doing it in the name of efficiency. So far as the boundaries are concerned, the boundaries of water authorities will stay the same. There is no change in the actual boundaries at the moment. But I take the point my noble friend made.

Baroness Seear

My Lords, we on these Benches would like very much to support the noble Lord, Lord Davies of Leek, in his suggestion that this matter should be debated in your Lordships' House. It has been brought about with the minimum of consultation. There was a consultative document, but there has been no general discussion. It is a matter of very considerable importance for a large number of people, and the questions raised in your Lordships' House this afternoon have not, with all respect, been answered.

The Earl of Avon

My Lords, obviously again, I must say to the noble Baroness that that should be discussed through the usual channels, and with her extra influence it is more likely to come about.

Baroness Birk

My Lords, the noble Earl the Minister talked about savings and efficiency. Can he tell us how many jobs are going to be lost by the dissolution of the National Water Council? There is an ominous reference to discussions with the trade unions, but nothing about jobs lost. If there are going to be savings and greater efficiency. I think that this must mean that there are going to be jobs lost. I should also like to know what is happening to the something like £200 million investment in the Water Space Amenity Commission which is also going to go by the board at the same time. I must support what the noble Baroness, Lady Seear, said: while obviously we do not blame the Minister personally, the answers have been extraordinarily unsatisfactory. If this is to be left in this way, there will obviously be very great disquiet from all sides of the House. I think the noble Earl should be aware that we cannot leave it like this and that it has certainly not been received very happily.

The Earl of Avon

My Lords, I take note of what the noble Baroness has said. With regard to the question about staff, there are various parts and functions of the central council, and some of those will be taken on by the regional water authorities. Until discussion with the regional water authorities has taken place, it is impossible to answer her question in depth.

Lord Gibson-Watt

My Lords, is my noble friend aware that the Statement that he has made today will be received very well in many quarters? The question of the Welsh problem was touched upon. I once for my sins had responsibility for reorganising Welsh water and it was then described as an explosive subject. The fact remains that the boards were too big when we created them, and may I say to the Government that I think they are quite right to make them smaller? With regard to the question of the council, is it not a fact, as the Minister himself said earlier, that the great work done by the council was largely used to set the system up, and as to whether it is necessary to carry that system further, may I be allowed to disagree with my noble friend Lord Nugent?

The Earl of Avon

My Lords, I am grateful to my noble friend for coming to my assistance at the end.

Lord Sandford

My Lords, is my noble friend aware that I do think it is, to say the least of it, discourteous to make a Statement like this in the House without giving local authority associations any notice that it was being made, still less what was going to be in it. He is aware, of course, that all the local authority associations would very much deplore this development. My own disposition is to despair at the inability of my noble friends in Government to see the danger of putting local services of this kind directly in the hands of major central Government departments.

The Earl of Avon

My Lords, as far as my noble friend's earlier comments are concerned, of course we equally have to be careful that we do not announce things outside Parliament before Parliament itself hears them. I do understand that this morning very considerable telephoning went on in order to inform people as much as possible.

Lord Mancroft

My Lords, would the noble Earl agree that, in view of the number and complexity of the questions put to him on this very important matter, there is possibly a job of public relations to be done to explain to the many consumers of water throughout the country exactly what he has explained so lucidly and so carefully to the House this afternoon. I ask him that question as a consumer of water in the borough of Avon.

The Earl of Avon

My Lords, with that added sting in the tail, of course, I will take my noble friend's point to my right honourable friend.

Baroness Phillips

My Lords, are the Government in possession of evidence which shows that consumers consider the water authorities inefficient? The only complaints that I have ever had have been on the charges for water. I cannot recall anyone ever complaining about inefficiency.

The Earl of Avon

My Lords, I bow to the noble Baroness' knowledge, but of course we have got the Monopolies and Mergers Commission's report on which we are basing this particular action.