It is a pleasure to see you taking up your new duties, Madam Deputy Speaker.
Monopoly is the evil that we are here to debate. It is monopoly that stifles innovation. It is monopoly that drives prices higher. It is monopoly that takes away choice and consumer power, and it is monopoly that leads to rationing. We saw all those features in the water industry when it was nationalised. I am amazed that the Labour party still has people who think it would be a good idea to go back to the nationalised water monopoly, which regularly ran out of water in the summer. Woe betide the man or woman who had bedding plants in a hot summer in Britain—because before global warming we used to get hot summers, and then the water would run out. It was a tragedy, because it was a direct result of the nationalised industry.
The privatised industry, I am pleased to say, has done one thing better than the nationalised industry—it has got access to more capital. It has mended a lot of pipes, put in new pipes, and put in some investment into dealing with dirty water as well, so we have fewer interruptions to supply under the privatised industry than before. However, we did not go far enough with
the privatisation. We transferred the ownership but, as some of my hon. Friends have wisely pointed out, we kept in place much of the regional structure.
We bought the idiotic idea that the industry sold to Ministers and advisers that because rivers run to the sea in separate geographical areas called river basins, it was terribly important to have local monopolies around a river basin. Woe betide anyone who wanted to move water from one river basin area to another, and woe betide anyone who wanted to use borehole water. Apparently, it all had to be organised around river valleys. Sometimes it is difficult to create boundaries between them, because tributaries and streams have a habit of not being as neat as administrative lines on maps, but it was decided that we had to have this “natural monopoly”.
There is no natural monopoly in the supply of water. As was pointed out by the right hon. Member for Holborn and St Pancras (Frank Dobson) who has recently departed the Chamber, rain falls across the whole of the United Kingdom, not always all at the same time, not always in the same quantities, but this island is not cursed with a shortage of rain for most of the time, and we collect very little of it. It is also not true to say that water is some precious resource that has to be husbanded because it will run out. Water is the ultimate renewable resource. It falls as rain; it mainly runs out to the sea; it is picked up by the winds and goes back into the clouds; and it comes back again as rain. Nature or God, depending on one’s beliefs, does most of the job for us, producing an endless supply of water to this country. All that we have to do is provide business people who can raise the capital to make sure that we capture enough of that water in a form that we can then put into pipes, and that we clean it up to an appropriate standard for the use.
We did not introduce competition into the industry when we privatised it, so many of the evils of monopoly are still with us. We have less rationing, but we can still have rationing. We have quite dear prices, although perhaps they do not go up quite as quickly as they did when they were part of a Treasury exercise. We certainly get more capital into the industry, but at the expense of quite substantial gearing, as some hon. Gentlemen have mentioned. However, many of the bad features of the nationalised industry are perpetuated and it is very difficult being a challenger to the industry, so I pay tribute to the former Minister, my hon. Friend the Member for Newbury (Richard Benyon), who produced a White Paper which is becoming a piece of legislation, which will try to open up the market a bit more.
I pay tribute to the modest steps taken in Scotland, where it was discovered that far from the taps running dry or the water prices going through the roof if the authorities dared to have more than one provider of business water, the opposite has happened: the prices went down—a little bit, because there was not a great deal of competition coming in—and above all the quality of service rose. I have talked to some of the Scottish businesses that have to deal with the water industry. They say that the great breakthrough in Scotland as a result of competition was the fact that they could get
a much better service. They could get the water supply when they wanted it and where they wanted it, and pipes and so on mended and repaired.
Businesses in Scotland can also negotiate with their water industry about what sort of water they want. At present, under a nationalised monopoly or a privatised monopoly, only one type of water is available. It is cleaned to a certain standard and it then has additives put in it. An industry wanting to make drinks may need to take the additives out before it can make its drinks, so there is a double cost and a nuisance, because it cannot get the type of water it wants. A firm that wants to carry out a fairly rudimentary washing business does not need water of a quality that we can drink, but it has to pay the extra price to buy the very high-quality water literally to tip it down the drain.
Therefore, we are not seeing experimentation, innovation or customer service because of a lack of competition. The industry is determined to supply only one grade of water and only the amount it can be bothered to supply, and then it blames the customer, should we dare to say that we want a bit more. We are now bombarded with messages from the industry suggesting that water is a natural monopoly and not the ultimate renewable resource. We are told that good people take only one bath a week in order to save water, that they do not use so much water for cleaning and that they ensure that they husband their use of water in their sinks and whatever machines they have at home that require it.
I have good news for my constituents: I do not believe that. I think that water is the ultimate renewable resource, that it ought to be made available more abundantly and more cheaply and that that could be done if we trusted competition. Surely one of the advantages of rising living standards, which is what we are all here to try to help create, is that people can then use more water because they have more things to clean, or because they wish to enjoy themselves in their bathroom. We need to ensure that they have access to the right quantities of cheaper water, and competition is the way to do that.