Water Bill

Philip Hollobone Excerpts

Monday 6th January 2014 Commons Chamber

[Hywel Williams]

As is often remarked, Wales is the land of mountains and valleys, and of lakes and rivers. It is therefore very appropriate that I, as a Welsh Member, speak on the Water Bill.

Water and lakes have had a central part in Welsh culture for many centuries. We witnessed astonishing discoveries some decades ago at Llyn Cerrig Bach, the lake on Ynys Môn, of metal offerings to the gods from 2,000 years ago, including some gruesome slave chains.

There is the story of Llyn y Fan Fach. The poor farm boy wins the love of the maiden of the lake. By intrigue, they marry and prosper. He strikes her inadvertently three times, and on the third blow she returns to the lake with all their worldly wealth. There are many other such stories.

Our lakes have inspired poets—too many to quote. One very short extract, which I will translate, will suffice. Gwilym Cowlyd, in his long poem to the mountains of Wales sings thus:

“Y llynnau gywyrddion llonnydd - a gysgant

Mewn gw as gawd ofynydd

A thynn heulwen ysblennydd

Ar len y dwr lun y dydd”.

That translates as: the still green lakes sleep in a waistcoat of mountain, and splendid sunlight draws on the sheet of the water the picture of the day.

Our lakes and rivers inspired Welsh artists such as Richard Wilson, who is sometimes called the father of “English”—sic—landscape painting. His two substantial paintings of Afon Dyfrdwy, the River Dee, can be seen in the National Gallery. His defining painting of Llyn-y-Cau on Cader Idris can be seen at Tate Britain.

So far, so uncontroversial. That fits into the usual Wales box—it is nothing to disturb Front Benchers on either side of the House—and is the conventional picture of our country as a place of extreme natural beauty, and of a long-lived, varied and inspiring culture, but water has also been an emotive, emblematic and defining political matter in Wales for many decades. Let no one in the Chamber doubt or underestimate the power and significance of the water issue in Wales.

I referred in Committee to the controversy and conflict in the 1950s and 1960s over the drowning of Welsh valleys to supply English conurbations against the will of the people of Wales. That was demonstrated in this very House of Commons, when all but one of Wales’s MPs voted against the removal of the people of the village of Capel Celyn and the drowning of their valley to supply the burgeoning and thirsty industrial development of Merseyside.

At the time, the developers saw that as the entirely reasonable harnessing of readily available natural resources for much needed development. They wondered what all the fuss was about. Many Welsh people saw it as straightforward expropriation, akin to the highland clearances. Chillingly, the drowning of Welsh valleys led to the first sustained campaign of bombing in Wales, which, in a further development, led tragically to the injury of an innocent schoolboy, and to the deaths of two of the bombers and the jailing of some of the key perpetrators. Some hon. Members will be familiar with the pictures taken by Geoff Charles, the photo-journalist, of the 1956 demonstration in Liverpool. The people of Capel Celyn marched through the streets of the city to the council buildings, only to find the doors barred against them. Their banners, carried through a city still bearing the many scars of aerial bombardment, said: “Your homes are safe. Save ours. Do not drown our homes.”

One of the leaders of that march in 1956 was Gwynfor Evans, the president of Plaid Cymru, who in 1966 was elected as the MP for Carmarthen. He was the first Plaid Cymru MP, a political earthquake that still reverberates today. Let no one here today doubt or underestimate the power of the water issue in Wales. To borrow RS Thomas’s line, rather than

“Worrying the carcass of an old song”,

let us look at the situation facing us today.

Dwr Cymru Welsh Water is the provider for most of Wales and for parts of England. Dee Valley Water supplies part of north-east Wales and part of the north-west of England. Severn Trent Water supplies mid-Wales and benefits from its water resources. Indeed, it has a 99-year contract with Welsh Water, dating most recently from 1984, to supply up to 360 megalitres per day of non-potable water. That contract ends in 2073.

This arrangement has its roots in the Birmingham Corporation Water Act 1892. It might appear to some as reasonable and practical at the height of municipal power at the end of the 19th century or when water was in public ownership. Indeed, it was the pattern adopted on privatisation and it continues today. To others, it is nothing less than a clear injustice, with a private sector organisation from another country benefiting from a substantial part of what should be a valuable public resource for Wales.

The water industry in Wales is different from the industry in England and in Scotland. It is run on a non-profit distributing basis. Any profits are channelled into lower prices or investment in the service. This has led to below-inflation price rises for the past three years, with a promise of similar for the future; to a sustained lowering of the gearing of the organisation in an industry where gearing is notoriously high; and to a substantial and sustained investment programme.

To get to the nub of the matter before us in new clause 1, the current arrangements are that the National Assembly for Wales has responsibility for water in Wales, save for that water which flows from mid-Wales to England. New clause 1 provides that the National Assembly for Wales shall have legislative competence for water up to the geographical boundary with England—nothing more and nothing less. It is a reasonable aspiration for any legislature to have legislative competence for important resources within its territory, and it is reasonable that the current arrangements should be changed.

[Mr Philip Hollobone (Kettering) (Con)]

I am listening to the hon. Gentleman’s speech with great interest. When the water industry was established, the boundaries were set on the basis of natural watersheds, which, unfortunately, do not coincide with the boundary between Wales and England. Would the new clause not cause unnecessary and potentially expensive administrative complexity which would benefit neither Dwr Cymru customers nor those in England?

[Hywel Williams]

I thank the hon. Gentleman for his intervention. He anticipates my next points, though he is welcome to intervene again should he still be unsatisfied.

We are not in a static, pre-privatisation and pre-devolution situation. Things have moved on, not least in respect of the current status of the NAW as a legislature following the most recent Act—I note that some hon. Members still call it a Welsh Administration, but that is another matter—and there is the prospect of further change as a result of the Silk commission’s reports. Change is central to the relationship between England and Wales, and has been so at least since the establishment of the Welsh Office in 1964. The pace picked up enormously since 1997 and 1999, with the establishment of the Welsh Assembly. The then Labour Secretary of State for Wales said famously that devolution is a “process, not an event”. That is a truism, whatever the current Labour First Minister in Cardiff might wish for as a constitutional settlement, so that it will “all just go away” and he can continue on his unambitious meander.

Plaid Cymru tabled amendments to Labour’s Government of Wales Bill in 2005-06 that would have had a similar effect to new clause 1, but the then Labour Government rejected them. They retained what, as a shorthand, I call the “London veto on Welsh water”. Their attitude was in contrast to that of the then hon. Member for Suffolk Coastal and former Environment Minister, John Selwyn Gummer, who is now in another place. In response to my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd), he said:

“Under the clause, a Secretary of State, by diktat, would be able to say that a Measure that has a passing or glancing effect on some matter of importance—sufficiently important for the Assembly to feel that a Measure is needed—should be stopped because he has ‘reasonable grounds to believe’ that it would have an ‘adverse effect’. It is difficult to imagine that a Secretary of State would not be able to stop anything that he did not like. The condition of having ‘reasonable grounds’ does not help, so vague is the wording used in the following paragraphs.”

It was not just the Plaid Cymru MP who was sceptical about the Labour Government’s attitude. John Selwyn Gummer went on to say:

“I agree with the hon. Member for Meirionnydd Nant Conwy.”

That was his constituency at the time.

“Either we trust the Welsh people or we do not. It is extremely difficult for me to accept that the Welsh people have to be singled out and measures taken to ensure that, where water is concerned, they should not in any way or in any circumstances be able to do anything that might upset the plans of English Ministers.”—[Official Report, 24 January 2006; Vol. 441, c. 1359.]

--- Later in debate ---

[Hywel Williams]

The hon. Gentleman anticipates my next point: it is a matter for the Welsh Government to decide what they would do; they have the right to decide for themselves. What I am against is this place’s veto and this place telling the Welsh Government what they would or should do. I think that in a reasonable world—and I think the Welsh Government are very reasonable people—they would be highly unlikely to turn the off taps, but they might be able to reverse what I described earlier as a patent injustice. What might the Welsh Government do with legislative competence up to the border? That is a matter for them.

This Water Bill introduces competition into water provision. Water companies in Wales are wholly or mainly exempt, but that still leaves open to competition a huge area of Wales owned by Severn Trent, which is expressly against the wishes of the Welsh Government—at least for that part of Wales for which they have the power to decide.

[Mr Hollobone]

I am following the hon. Gentleman’s speech with genuine interest. If water is abstracted from the area within Dwr Cymru’s competence and Dwr Cymru receives proceeds from that abstraction, could that money be used to keep water bills down for the vast majority of Welsh Water customers?

[Hywel Williams]

I thank the hon. Gentleman for his intervention. As I said, the agreement with Severn Trent predates privatisation, and the amount of money that changes hands is, I think, nominal. I have to confess that I do not know precisely how much it is, but my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) has referred in the past to a very small amount of money changing hands, which has only a marginal effect on what Welsh Water is able to achieve. I would also point out that what it achieves by being a not-for-distributive-profits organisation is enormously greater than any money it might get from Severn Trent.

[Mr Hollobone]

The hon. Gentleman mentioned fracking, which could well be a growth business in Wales as in England. From what he says, it seems to me that any water abstracted from Dwr Cymru’s area could mean a negotiation between Dwr Cymru and the users of that water. If it wanted to do so, Dwr Cymru could charge quite a high price for what is a very valuable resource.

[Hywel Williams]

The hon. Gentleman makes a fine point. That would be the case if, say, Northumbrian Water sells to Yorkshire Water: there are different prices in different parts of the country, depending on the economics of the transport of water. The moot point about water is that it is in some ways a transport business rather than a water supply business, because water is extremely heavy and difficult to move about. It would be a matter of negotiation. As I pointed out, however, Welsh Water does not have control of some of the more significant water resources in Wales—the water sources in mid-Wales. Incidentally, I do not want to stray from the water industry, Madam Deputy Speaker, but fracking might take place in south Wales and possibly not in north-west Wales—the part I represent. Someone has to say that, I suppose—start at home.

Ofwat addressed the matter of realigning legislative competence in its evidence to the Silk commission. People who frighten the horses over the costs would do well to listen to what Ofwat had to say about the “potential impacts” of moving away from the “wholly or mainly” boundary—that is, the current situation. It said:

“During our evidence session I was asked about any possible impacts of moving away from the current policy boundary definition. We believe that there are likely to be some administrative costs to companies (and customers) from such a change and that there could be some incidence effects on customer bills (which could be positive or negative for different customers).”

In other words, it will impact differently, but Ofwat says:

“Generally we would expect both of these to be relatively minor.”

I do not think that there is a reason to be particularly frightened of any costs that might be involved.