Equalisation Payments to Be Made to Certain Water Authorities

Part of Orders of the Day — Water Charges Equalisation Bill – in the House of Commons at 12:00 am on 16th March 1977.

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Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath 12:00 am, 16th March 1977

I am afraid that the hon. Gentleman is not as conversant with the Bill's provisions as I thought. It is clear from the provisions that the Secretary of State has to determine the matter in advance of the year and make a decision in advance of the year. The Bill does not allow him any degree of retrospection. It is not usual in our procedures to allow for retrospection. The retrospection in the Daymond case came about only because of a decision by the Law Lords with which we had to deal. They declared that the law was different from what we believed it to be. That is quite different from passing an Act of Parliament and allowing for retrospection.

I understand that the hon. Member for Isle of Wight (Mr. Ross) saw fit to complain about the effect of regional equalisation. At the time that the Water Act passed through the House, the hon. Gentleman and I, as well as others, pointed out the effect of regional equalisation. Therefore, the hon. Gentleman is entitled to make his complaint. With the industry operating on a regional basis, wide discrepancies among domestic users became apparent, from 46 per cent. above the national average in Wales and the South-West and slightly less than that in Norfolk, Suffolk, Northumberland and Durham to 18 per cent. below. We took the view that that was an impossibly wide variation of charges for an essential commodity. The Bill reduces that variation to 28 per cent. above and 12 per cent. below.

In response to the intervention of the hon. Member for Merioneth (Mr. Thomas) I stress that two things go side by side in respect of the Bill. The country as a whole, particularly the receiving water authority areas, except places such as Wales, which supplies so much of the water to England, should not make a profit out of water transactions. The proposition in the Bill that I set out on Second Reading is accepted, namely, that all such water transfers should be on a non-profit-no-loss basis. If that is essential for the future safeguarding of supplies, especially to the Severn-Trent Authority, the East Midlands and Lancashire, and possibly in future to the Thames Authority, if it is important to give a guarantee to water consumers in the Midlands, Lancashire and London that there will be no profit made out of future water transfers, it seems that there is a moral obligation upon us all to help people in Wales, the West Country and Anglia suffering under the present pricing arrangements and to give them the degree of equity which the bill seeks to bring about.