Water Charges
This afternoon's first debate is on motion S1M-639 in the name of Bruce Crawford, on water charges.
Earlier this week, John Reid—that increasingly irrelevant politician—issued a statement that called on Labour party members to stop fighting one another and to start talking about what Labour is delivering in Scotland. The SNP has no control over the internal problems of the Labour party, but we think that it is a good idea to talk about what Labour is delivering in Scotland. In a couple of weeks, Labour will deliver astronomical water bills and council tax bills to households in Scotland—the SNP is delighted to be talking about that.
I welcome the opportunity to debate in Parliament the water industry. Parliament has been up and running for nearly 10 months, yet this is the first time that the water industry has been on the agenda for proper debate. That says a lot about the Executive's priorities.
I have a point of information for the member. In January, there was a ministerial statement on water; members had the opportunity to ask questions on that. It is not true that the matter has not been on the agenda.
I do not find that comment particularly helpful—we have had ministerial statements and many parliamentary questions, but this is the first time that we have had a proper debate.
The water industry is of enormous significance to the people of Scotland. The industry has a turnover of £600 million per year, it employs 6,000 people and it is worth between £12 billion and £16 billion. The industry is responsible for delivering clean, safe drinking water and for the efficient, environmentally friendly removal of waste throughout the country. However, because of decades of mismanagement and neglect under successive Tory and Labour Administrations—at both national and local level—the industry faces huge challenges. There is a desperate need for the renewal of the industry's infrastructure if it is to continue to deliver a proper service throughout the century.
The Executive has failed to rise to the challenge; it has passed the buck to the consumers in the form of a tap tax. Scotland is turning into a nation of ironies. Scotland has lots of oil and gas, but we charge the highest prices for petrol at the petrol pump. Scotland is the home of whisky, yet one can buy whisky more cheaply abroad. Scotland has an abundance of water resources, yet we are subject to water charges such as those that have been announced today.
In East of Scotland, there will be a 22 per cent increase in water charges and in the west the increase will be 18 per cent. In North of Scotland, there will be a 42 per cent increase across the board and in Tayside the increase will be a staggering 46 per cent. Since Labour came to power, charges in the area that is covered by the North of Scotland Water Authority will have increased by 114 per cent. Charges have risen by 85 per cent in the East of Scotland Water area and by 88 per cent in the West of Scotland Water area. In the Forth valley, charges have increased by 181 per cent. Those increases are before next year's announced increases come into play.
The message from the Scottish Executive—particularly to people in the NOSWA area—is "Tough luck." Apart from the matter of water bills, there is the potential 10 per cent increase in council tax that was announced this week, and the high fuel tax throughout the north-east and north of Scotland.
The SNP could not agree more with the Executive's statement that the twin challenges are to meet the aspirations of the Scottish people for high environmental standards and drinking water quality, and to do so at the minimum cost to the customer. The Executive, however, does not want to do that at the minimum cost to the customer, but at the minimum cost to the Government. The policy is like taking out a mortgage for capital works over 30 years, but making consumers pay the bulk of the repayments over the next two years. That is not what we would do with our own houses, and it is not what the Executive should be doing with Scotland's water industry.
The purpose of government is to deliver essential public services, but who would have thought that new Labour, which used to call itself the people's party, would leave consumers struggling to pay for an essential service—the supply of water?
The Government seems to be more interested in supporting the millennium dome than the water industry in Scotland. The Scottish Executive is not spending one penny of its own money on Scotland's infrastructure and no measures are in place to ease the burden on consumers—since the end of transitional relief, there has been nothing.
The Executive is making a mess of Scotland's water industry. Under Labour, water consumers have been taken for a ride, and all sorts of folk are making money out of Scotland's water. Private companies are making a packet through the private finance initiative. In one project, £6 million was spent on procurement costs and preparations—that is ridiculous. Cash is being transferred from the pockets of consumers directly to the pockets of the shareholders in private companies that have been brought in to run Scotland's water industry.
The PFI policy for the water industry is in tatters. In September 1999 I asked the Minister for Transport and the Environment a written question. I asked whether she would examine the
"implications of PFI on the water industry and the implications . . . for charges for water and sewerage customers."
The minister responded that she would
"reply to the member as soon as possible."
Five or six months later, I am still waiting for a reply, because the minister is terrified of the answer.
This week, I learned from the water authorities that they do not want any more PFI—they have been through that experience and do not want to go through it again. They are examining ideas such as the Dutch water bank to raise cheap finance and to avoid the involvement of the private sector. Members know that the water authorities asked to have their own bond issued a few years ago, but were turned down flatly by the previous Administration.
The water industry is ideal for low-cost investment that can be secured against a definite income stream of water rates. That is why PFI is so inappropriate for the water industry. It is not just PFI providers who benefit—it is also the fat cats at the top of the tree in the water authorities. The posts of chief executive are being readvertised. The salary for those posts has been increased by about 30 per cent—to about £120,000 per year—and there is a 10 per cent bonus. Is that really where consumers want their bill payments to go?
Consumers' bills are being used to feed the quango culture in Scotland. There is another broken promise: new Labour forgot to throw the water boards on the bonfire of the quangos. Now, people such as Colin Rennie, chairman of NOSWA, is getting £36,000 of consumers' money for a one-and-a-half-day-a-week job. He had the cheek to tell water consumers that the increase in the north of Scotland is equivalent merely to the price of a packet of crisps a day. It is, I suppose, possible for him to say that comfortably, earning—as he does—a salary of £25,000 plus lots of bonuses.
The Minister for Transport and the Environment could be doing a lot to keep water bills down. She could write off debt. Will the minister accept that we are in the current mess because of the Tory Government's failure to write off debt at the time of reorganisation of the water authorities in 1996? That Government wrote off only 40 per cent of the debt. Will she also accept that the mess is a result of Labour's decision not to increase the percentage of debt that was written off when it reviewed the water industry in 1997?
Will Mr Lochhead tell the Parliament what he would cut to absorb the debt?
If Mr Tosh would like to listen closely to my speech, he will find that I will cover that subject in a few seconds.
In 1989, the English water industry had 90 per cent of its debt written off by the Treasury; the Scottish water industry had only 40 per cent of its debt written off. A £1.1 billion green dowry was also injected into the English water industry.
Answer the question.
I now come to the external financing limits. External finance has fallen as a proportion of investment, and a greater burden is now being passed on to consumers, with less borrowing to finance new investment.
It would not be a debate without an intervention from Richard Simpson, so what can I do but accept one?
I would still like to hear an answer to Mr Tosh's question. How, from within the block grant, does Mr Lochhead propose to finance the debt that he would write off? I estimate the debt to be around £1 billion, which would mean that one sixteenth of our entire block grant would be used to write off that debt next year. Is that really what Mr Lochhead proposes, on top of the £2.5 million that he has spent already?
The member should listen; I was about to address that point when he interrupted.
Over the next two years, borrowing has been limited to £435 million, which will mean that capital investment will come out of revenues. Customers are being forced to cough up the shortfall of £1.8 billion in the next two years. Why does not the Executive increase the external financing limits and allow the costs of the new infrastructure to be spread across its lifetime, rather than putting the full burden on customers for the next couple of years?
The Executive, and its colleagues in London, should come up with a cash injection for the Scottish water industry. Is not it ironic that today's headlines in the media are about oil prices never having been higher, and how tax revenues will now flow to the London Exchequer? Why cannot Scotland get some of its own cash back, so that we can upgrade Scotland's water industry? Perhaps the minister should speak to the Chancellor of the Exchequer.
What is the Government doing to help people pay their water bills? What will it do to help pensioners, whose miserly 75p increase in pension per week has been wiped out by the rise in water charges? Massive charges have been announced today, yet the minister tells us that consultation will take place during the summer on how to help low-income families. The damage is being done now; summer will be too late. Why did not the minister think of that before? The Parliament has been up and running for 10 months—why is the minister closing the stable door after the horse has bolted?
Another threat that the minister has failed to address adequately is that posed by the Competition Act 1998. A consultation paper will be published in April, but that act has been in force since the beginning of this month and we have known about it for years. Is the minister aware that Anglian Water, Northumbrian Water, Southern Water, Thames Water and Yorkshire Water Services have opened offices in Scotland and are working here? They are here not for a picnic, but to make money out of Scotland's water industry.
Labour has abandoned water consumers in Scotland and it has abandoned the water industry. The message from the consumers is, "Stop milking us dry and go back to the drawing board. Stop hitting the people of Scotland with bill after bill to keep the Treasury in London happy." It is unreasonable and unfair to expect that customers should in the next two years pick up the whole bill for the neglect of our water industry by successive Labour and Tory Administrations. The water industry is not safe in new Labour's hands and I ask Parliament to support the SNP motion today.
I move,
That the Parliament believes that the impending rise in water charges which have been approved by the Scottish Executive is as unacceptable and damaging as the rises in the local authority council tax forced on local authorities by the Executive's inadequate local government financial settlement; notes that the Executive is failing to make any financial contribution to the maintenance of adequate standards in the water industry just as it is failing to adequately support essential local government services; calls for the increases in water charges to be kept to a minimum and for measures to be taken to avoid consumers being forced to pay the cost of past neglect of the industry including a review of external finance limits, the scrapping of the Private Finance Initiative and the cancelling of debt in the industry to avoid unnecessary and unfair increases in water bills, and condemns the apparent indifference of the Executive to the rise in water bills, the increase in council tax and the cutting of local government services particularly with regard to their impact on the most vulnerable in society.
Our amendment to the motion is an accurate reflection of what we have been doing and addresses the problems that we have in the water industry in Scotland. We have had two discussions in Parliament on the water industry. In the summer, I announced the appointment of the water industry commissioner and what we planned to do in light of the Water Industry Act 1999. I also announced in January the results of the strategic review of water charges for the period April 2000 to March 2002. We have discussed the issue in Parliament. We have had ministerial statements. I will address the specific parliamentary question that Mr Lochhead suggested had not been responded to and will get back to him as soon as possible. Mr Lochhead and his colleagues have asked a huge number of questions on the water industry. I have answered those questions and given as much information as possible.
The framework that I set out in January was based on our commissioner's advice that the authorities have to increase their revenue to meet substantial and urgent investment needs. The commissioner argued that we needed a significant acceleration of investment to renew and improve our infrastructure. I am conscious of the need for investment, but also that people—both domestic and business users—have to pay the bill. I therefore moderated the water industry commissioner's proposals, reflecting our determination still to provide the water authorities with sufficient ability to invest.
Will the minister give way?
Not just now.
Our aging Victorian infrastructure has suffered from decades of under-investment. The cumulative underspend is estimated at about £2.5 billion. It is not possible to ignore the consequences of that. We cannot allow our mains and sewerage systems to continue to decay, threatening more burst pipes and disruption to supply. We cannot ignore European legislation, which rightly demands higher standards in the interests of public health. The urban waste water treatment directive will require proper sewage treatment for all our towns and cities, and the drinking water directive sets tough, new, safer standards. We cannot turn our backs on the need for such investment, for higher-quality water and for improved service quality. We need to do more to clean up our beaches.
I have asked the minister this question before, but have not received an answer. Will she confirm that a proposal from the water companies in Scotland to finance future investment through a bond issue was turned down by the Labour-run Scottish Office—yes or no?
As I told Mr Salmond in a letter earlier this year, I can confirm that a bond issue would not have been a more appropriate way in which to proceed, because it would still have been counted as borrowing. It would not have been cheaper than the money that we, as central Government, are able to lend. I am quite clear about that.
We cannot turn our backs on the need for investment. We have heard nothing from the Scottish National party about practical suggestions that would let us invest.
Will the minister give way?
No, thank you.
The overall revenue increases for the Scottish water authorities in each of the next two years—15 per cent and 12 per cent for the East of Scotland Water Authority; 35 per cent and 12 per cent for the North of Scotland Water Authority; and 15 per cent and 12 per cent for the West of Scotland Water Authority—were designed to allow us to ensure that we can begin to tackle the backlog of investment. The increases total £1.8 billion over the next three years.
In the west, for example, £140 million will be spent on constructing more than 30 new waste water facilities for coastal towns and communities. In the east of Scotland, each region will benefit from major investment programmes.
Will the minister give way?
No thank you, Dennis.
Around £87 million will be spent on waste water treatment in Fife and £72 million will be spent on the water treatment that is required in the Forth valley.
Will the minister give way?
No, thank you.
In the north, £12 million will be spent to provide Inverness with its first water treatment works, which means that the town will have properly treated water for the first time ever.
A good example of investment in rural areas is the fact that almost £1 million has been spent in west Gordon and Midmar on a new water supply—meeting modern-day standards—for a community of around 80 people. That works out at investment of around £12,000 per head.
Investment will happen throughout the country. The strategic decisions have now been translated into charge schemes for the coming financial year. I understand that the schemes have been agreed and made public today.
When water services in the Falkirk area were owned and administered by local government, good, forward-looking investment programmes were combined with the lowest water charges in the whole of Europe. Now the east of Scotland water quango is proposing average increases of 15 per cent, which is more than seven times the rate of inflation. In some cases—believe it or not—increases of more than 70 per cent are proposed. Will the minister intervene to stop such excessive increases, which are putting a crippling burden on many domestic consumers and businesses?
I do not underestimate the need to make investment. I come back to the point that we need to meet higher standards. There are tougher European directives to meet and we must clean up our beaches.
The water authorities' average increases in domestic charges over the next year will be just under £40 a year, or around 75p a week. When I spoke to Parliament in January, I acknowledged that large increases would not be welcome to customers. I accept that. We need to examine the impact of charges on low-income households. I said then, as I say today, that I will carry out a review. It would not have been possible to carry out a review before today's announcement in time to affect the charges for this year.
Will the minister give way?
No, thank you.
It is important to know that the current arrangements link to council tax bands, so there is a link to the less well-off, with substantial assistance for people on lower incomes.
As the Minister for Transport and the Environment in Scotland, can Sarah Boyack tell Parliament how many people in Scotland have arrears on water charges and how many more she expects to be in arrears as a result of the increases?
That is one of the things that needs to be reviewed so that we can ensure that we can tackle the issue.
It is important to state that the average charge increase for band A householders will be only two thirds of the band D increase, which means an average of 60p a week for band A householders.
One of the key things in Scotland is that people cannot be cut off.
Will the minister give way?
No. I have already taken interventions.
The significant charge increases make it even more important for the water authorities to give their customers value for money. How they respond to that challenge is crucial for the long-term health of the industry. That is why I endorsed the water industry commissioner's two proposals, first, on clear benchmarking to allow us to compare Scottish authorities with the best in the United Kingdom; and secondly, to ensure that higher customer standards are available throughout Scotland.
Will the minister give way?
No, thank you.
Our standards will focus on issues that are genuinely important to customers, such as better response times and reducing the number of disruptions to service. We can match the best in Europe. Our authorities will have to provide better quality services; as I announced in January, we will initiate a consultation on that in April.
We demand the highest standards of customer service and efficiency from our public water industry and we are determined that that is what customers will get. Mr Lochhead alleged that the charge increases will be unfair to rural areas, particularly in the north, and that we have not done anything to tackle that issue. That is not true. The legislation requires "no undue discrimination" between customers. We know that it costs more to provide healthy drinking water and acceptable waste treatment facilities in sparsely populated areas. It is unacceptable that 65 per cent of sewage in the north pours untreated into rivers and the sea. Does the SNP really think that that can continue, or is it adding another public spending commitment to its growing list?
Will the minister give way?
No, I am running out of time.
The Scottish Executive has taken a responsible approach, ensuring a firm footing for the water industry rather than pretending that there is an easy way out. We have increased opportunities for external finance—an increase of 50 per cent over the next two years for NOSWA and an extra £20 million in external financing for the water authorities in this year's budget. To go further would push debt to an intolerable level.
The main point is that investment is needed and it must be paid for. We are making sure that, with a regulatory regime, the investment will give value for money. We are taking the hard decisions that will put the industry on a firm basis, as a properly funded, successful and, above all, public water industry with high-quality services for customers. That is what people want and need—we cannot compromise on drinking water quality or environmental protection. We must invest, and this is the way forward.
I move amendment S1M-639.1, to leave out from "believes" to end and insert:
"recognises that the Scottish public water authorities need to make very significant investments to deliver the high quality, safe and reliable water and sewerage service that the Scottish public and Scottish business need; recognises also that Scotland must meet the standards to protect health and the environment laid down in European and national legislation; welcomes the additional external finance made available by the Scottish Executive for the water authorities in the recent spending round; notes that the current system already provides a degree of protection for the most vulnerable through the link to council tax banding; welcomes the review of these arrangements that has been announced; welcomes the Water Industry Commissioner's initiatives to increase efficiency, customer service and accountability in the water industry; and therefore endorses the strategic framework for the industry set out by the Scottish Executive in January."
In moving my amendment, I welcome the opportunity to debate water for the first time in this Parliament. As the motion covers local government as well, I hope that we might have the opportunity to debate some of the horrendous expenditure cuts that councils will be making this week, not least by South Ayrshire Council in a couple of days.
The central truth about our water industry is that there is a great need to invest heavily to meet the standards laid down in European Union directives, to which all parties in the Parliament are contributors in the sense that we have all agreed them. When local government reorganisation took place, it was decided to retain the industry in public ownership; the inevitable consequence is that external financing limits or borrowing consents apply. There is only so much that can be afforded and funded through borrowing consents and the public sector expenditure categories.
I find the Scottish National party motion somewhat cynical in its use of the phrase:
"review of external finance limits".
Does that mean to cancel them or to do without them—unlimited borrowing? How would the SNP fund the industry? What would it cut from the Scottish block massively to increase capital expenditure? Would the SNP take that from education or health expenditure? What money would it use?
I suspect that the money which the SNP would use to cancel the water debt and to fund the increased borrowing consents is the same money that it was going to use a fortnight ago to build our motorways, which is the same money that a fortnight earlier it was going to invest in railways. Or perhaps it is the same money that a fortnight before the SNP was going to spend on increasing pensions.
How many more times can the money be recycled? It is like the drinking water in London—it goes through the system time and again.
Remind me not to accept a glass of water from you.
Are the Conservatives happy with the rises that are proposed by the Liberal-Labour Government? If so, could the member say which budgets were cut to provide the £1 billion injection into the English water industry at the time of privatisation and the £4.4 billion debt write-off that was made?
I am not here to argue the case for water privatisation. Nor am I here to deal with what happened some years ago because, frankly, I am not equipped to deal with it.
This Parliament has a block grant, and it has legislative and executive responsibilities. The issue for this Parliament is how we will discharge those responsibilities. It is very neat to come here and say, "Write off debt," and all the rest of it. The SNP is not keen on privatisation, so I am surprised that it is taking that line this afternoon. Where will the money be taken from? What money would the SNP use to write off the debt? What would the SNP cancel and cut?
In this Parliament, we have the economics of the kindergarten. Every week, the SNP brings forward a magic porridge pot, from which it extracts all its resources. The story of the magic porridge pot was that, eventually, the people who summoned up all the porridge drowned. I suspect that the SNP will drown in a welter of unfulfillable promises in the near future.
Will the member give way?
No, because I want to pick up something else from the
"review of external finance limits".
The SNP says, "We will have that review, and at the same time we will cancel the private finance initiatives." Is not that wonderful? I hope that everybody in Ayr, Prestwick and Troon, whose towns have been dug up for the past two years, will notice that the SNP is proposing the cancellation of the sewage treatment works at Meadowhead—or perhaps the SNP will fund that £50 million from some other back pocket.
The member needs a glass of water.
Given that the member has spent the first four minutes of his speech attacking the SNP, how does he propose to keep water charges down, the high level of which he has also attacked?
The funny thing is that I have also been speaking to people in the water industry. Perhaps they say different things to people from different political parties, but they have told me that in the past two or three years the game has moved on hugely. They are worried by the implications of the Competition Act 1998. There is a deficiency in the Executive's approach. Its motion does not reflect the changing nature—
What is the answer?
I am giving the answer, so sit still, shut up and listen.
The water boards tell me that essentially, they require access to capital investment, and they know that that has to come from private sources. They want a change in their structures, remits and powers, to allow them to enter into partnerships with private investors that will fund investment. There is no other way to do that, because the SNP is tied by external financing limits, and we are all tied by the Scottish block. We need to equip our water industry to compete in a new and much more threatening environment than it has been even in the past two or three years, and to face the threat of competition from the privatised companies—the big water boys south of the border—because that competition is just round the corner.
You should know—you privatised them in the first place.
Indeed. The purpose is to generate additional investment. We need that investment. We cannot sit here and talk about the water and sewerage provision that we were happy with in the early 1970s, when the old Labour politicians learned their slogans and gut instincts. The world is moving on, and we need massive sums of money. Those sums have to come from investment, and have to be raised through our public sector water boards, which want the power, the freedom and the scope—[Interruption.]
My time is up. I am being told that I have to stop.
You have one minute, Mr Tosh.
The water boards require private capital to invest, and if they cannot invest, targets will be missed and our consumers will face higher bills in future. We condemn the water charges and the inactivity of the Executive. We deplore the fact that so much capital expenditure is loaded on to current expenditure; we must find proper ways to bring in more money for investment. The idea that somehow it can all be solved by a wee wave of the wand and by abolishing finance limits is wishful thinking. It is nonsense. It is the typical SNP parade of jam, jam, jam and loads of money, but the SNP does not have to provide the funding. It is irresponsible nonsense.
I move amendment S1M-639.2, to delete from "believes" to end and insert:
"notes with concern the increasing cost of funding capital expenditure on water and sewerage from annual water charges; calls for a review of the structure and powers of Scotland's water authorities, with a view to funding programmed capital expenditure from capital sources, and condemns the Executive for this year's increase in water bills and council tax levels and the deep cuts forced on council services by the reduction in resources for local government from levels available under the previous Conservative Government."
Murray Tosh has obviously had too much Ayrshire air in the past few days. He certainly needs a bit of air-conditioning now.
As Mr Lochhead's only solution was to look to Westminster for sources of finance, it appears that he missed the launch of the Scottish National party's flagship policy today, which apparently ditches Westminster for ever, saying that it is totally irrelevant. That rather drove a coach and horses through his argument.
Neither Mr Lochhead nor Murray Tosh had an answer to the question, "What would you do?" In a debate that reflects the concerns of all of us about water charges—everyone has had representations on the matter—it is the responsibility of those who are speaking from the front benches to come up with some clear ideas about how they would deal with the issue. I do not have a problem with any party criticising what the Executive is doing, as long as it has a reasoned way of doing it better. We have not heard that from either of the Opposition parties.
I will finish my point.
Murray Tosh glossed quickly over what happened with privatisation in the past. Some of us still remember that it was the Strathclyde water referendum that ditched attempts by the Tories to privatise water in Scotland.
In fairness to Murray Tosh and, I think, to Richard Lochhead, no one disputes the fact that a massive injection of capital investment is needed—they accepted that, but they did not say how they would do it. Consumers face massive increases—
I am sorry, but I was very clear. I said that the bulk of the capital expenditure being met at the moment from current annual charges needs to be moved into proper capital expenditure, for which we need to find structures and partnerships that will draw in more money. That is what the water boards want.
I apologise. I missed that in the wide—how would I describe it—contribution that the member made.
All three water companies are calling for RPI plus 7 per cent until 2012 at least. Scottish households face significant increases—the figures show that over the 12 years to 2012, water costs could increase by 150 per cent to 200 per cent. It is feared that potentially, Scottish water and sewerage charges could be the most expensive in the UK.
The Executive is right to push for progress in protecting pensioners and low-income families. We have all had representations, particularly from people in those spheres, seeking help in that area. I hope that the minister, in her summing up, can be a little clearer about what is being introduced to help people on low incomes, particularly pensioners. I have had representations at constituency surgeries from people who are concerned about the difference between what will, apparently, be given in pensions in the forthcoming budget and what they might face in increased water charges.
However, there are other options for improving the current costs. There is the potential for co-operative action among the three water boards, including, for example, joint billing services, joint service centres, joint complaints systems and savings on information technology. We should look to the water commissioner to take forward such ideas. The potential for co-operative action, in line with the spirit of the announcements by the Minster for Finance last week on local government, is important.
Tavish Scott referred to the Water Industry Commissioner for Scotland, which costs around £1 million a year. Do the Liberal Democrats agree that there is a strong case for considering whether the role of the water commissioner is necessary and whether we should be passing on that £1 million, to reduce some of the swingeing increases that the Executive has sought to impose?
The water commissioner's role has been in place only since last November. We need to consider how that office can deal with some of the suggestions that I have just proposed. I would like to wait and see what can be done. However, Fergus Ewing has a point, in regard to the overall cost of that particular operation.
The other matter that could be considered is the structure of the boards and whether the three boards that we have at the moment are the right way to deliver the service. Again, there must be economies of scale. To answer Fergus's point, the water commissioner should be charged with considering whether, in the context of the three boards, there is a better way to deliver the service.
There are issues of accountability—I am not sure whether we have accountability today. One cannot predicate a whole argument on local accountability—that is a dubious proposition, considering the way in which most people in Scotland currently view those structures. Options for economies of scale and improving overall service delivery must be considered.
Murray Tosh raised some important points about where the Competition Act 1998 impinges on water authorities. I hope that the minister will clarify that in summing up.
Scotland's water industry needs investment. We must alleviate hikes and charges, especially for pensioners and those on low incomes. I encourage the minister to consider streamlining and equalising charges through the structure and organisation of the water companies.
There is time for only four speeches from the floor, each of which should take no more than four minutes. I call Michael Russell.
Mr Tosh made a remarkable speech, which made some of us look round to see whether there was a doctor in the house. Fortunately, there is a doctor in the house and, doubly fortunately, he has a qualification in psychiatry.
As Mr Tosh rightly said, the debate is not just about water, but is about local government, and the motion deliberately draws attention to that. Water and local government are two sides of the same coin in Scotland, especially this week, when local authority council tax increases will be announced. They are two sides of the same coin for another reason. The 19th-century improvers had a great vision—not just in Scotland, but in America and throughout Europe—of public water supplies making a major contribution to public health and to the growth of society. The municipal reformers had a similar vision of the important role of local government in developing services for communities, and especially for those who were most vulnerable and needed most help.
This week, we have seen—as we have seen repeatedly with new Labour during the past several years—that both those obligations have been abandoned. They have been abandoned in the most cynical way, because the pretence is kept up that there is a belief in improvement and in public service. The reality is that the obligation is being given to somebody else. "Spin, not substance" is the epitaph of new Labour. Everybody has a responsibility except new Labour, whose members stand back and pretend that nothing is happening.
Burdens on local government are significant. New burdens are being added to local government, but there is no new support. The figures speak entirely for themselves, and I am sorry that there is no local government minister here to talk about them. Mr McConnell trumpeted the sum available this year as £5.94 billion. However, the Executive—trying to be fair—says that there are additional burdens of £120 million, so that has to be taken out of the figure. Then we begin to see the real figure. When one adds the new burdens that the Executive will not talk about—the obvious burdens of inflation and pay rises—the real figure for the local government settlement this year is £225 million less than last year's. It is not an increase; it is a cut of 3.9 per cent.
What is the impact of that? This morning, I met a group of concerned residents who were petitioning the Parliament in support of the Carrick Street day centre for the elderly in Ayr. Mr Tosh should note that I, too, have been in Ayr. [Laughter.] Labour members may laugh at that. That centre is to be closed and they are laughing about it. I hope that people note that they are laughing at that. Those old people in Ayr value their centre, which is being closed by stealth and sleight of hand by a new Labour authority. To be fair to that authority, it is being closed in the context of a shortfall in South Ayrshire of £6.5 million. In North Ayrshire, there is a shortfall of £6.25 million. In those two local authority areas alone, almost £13 million is being taken out of local authority budgets.
Water and local government services are, as I said, two sides of the same coin, and the Executive is avoiding its responsibilities. Who pays the price for that? Tommy Sheridan was right to say that the price is paid by every individual in this country. Mr Tosh may know the price of everything but, like the Executive, he knows the value of nothing.
I cannot give way to Mr Tosh. I have to wind up.
There is a price to be paid, and it is being paid by the ordinary citizens of this country. When they come to vote, those citizens will exact a high price from the Executive and from new Labour, because those citizens are the people who are suffering.
Mr Russell can never be accused of a lack of chutzpah—he does not allow ignorance of local government to get in the way of his speaking about it. My understanding of the situation at the Carrick Street centre is that there is a proposal to build something rather better in its place in the long term.
I will give way to Cathy Jamieson.
The Carrick Street day centre is used by some of my constituents—people tend to forget that part of Ayr is in my constituency. Does the member agree that the proposals by South Ayrshire Council to consult the people who use that centre, and to provide a more appropriate centre for them, are a step in the right direction?
You may answer that point, Mr McNulty, but then please get back to water.
The proposals are a step in the right direction, reflecting a sensible and practical approach to local government that Labour has pioneered and carried through for many years.
Sit down, Murray. What was especially striking about Murray's contribution—which was good in many ways—were the two things that he forgot to mention. First, the prime reason for the level of under-investment in water is the 18 years of Conservative rule. For a substantial part of that time, I was in local government and restrictions on the money that could be invested in water and sewerage services were very tight.
That had especially bad consequences in Ayrshire, because Strathclyde Regional Council needed to put a substantial investment in water and sewerage into Ayrshire. Despite the difficulties, the improvements made represented another example of Labour local government working effectively in spite of what the Conservative Government was doing.
The second thing that Murray Tosh forgot to mention was that the Conservatives came forward with a series of proposals for the future of Scottish water—proposals that were overwhelmingly and decisively rejected in a ballot in the Strathclyde Regional Council area.
All right—Murray can answer now for what Ian Lang was not prepared to defend at the time.
One of the options that was put forward was to organise the water industry in Scotland into three regional boards. That was the submission that the council on which I served at the time made to the Scottish Office, and that is what the Scottish Office did. I forget nothing: I well remember playing a part in establishing the structure that we have today.
I am afraid that the only Conservative who was left to defend the Government's position after the Strathclyde water referendum was Mr Pickaxe Stewart—and he did not do it very well.
There are serious issues to be addressed. If people want to be involved in the policy community that will decide the way in which we take this issue forward, there are things that they must accept. We have to replace the Victorian infrastructure after a lengthy period of under-investment. Under Labour, investment has grown substantially in the past two or three years, but we need much more, much more quickly, if we are to make our water industry modern and comparable with that which exists in some other parts of the UK. There has to be a substantial upgrading in investment to bring our water industry and—even more important—our sewerage industry into line with European standards. We have to meet a set of targets.
There are only three ways in which we can meet those targets. First, we can increase customer charges; secondly, we can use funds borrowed within the external financing limit; and thirdly, we can implement public-private partnerships. Those are the only three routes, and there has to be an appropriate balance between them. There are no cost-free methods of upgrading our water industry.
I have already taken two interventions.
The charges that we will have at the end of this process will be substantially less than those that will apply south of the border. That is the reality. If we compare both urban and rural contexts, the charges will be less than they are south of the border.
I accept—as it is only reasonable to do—that charges have to increase. Everyone involved recognises that if we are to have the infrastructure that we want, and if we are to meet environmental targets, we will have to increase charges. The debate should focus—and this is the real issue—on how that can best be done; on how we can take forward the process of investment; on what the balance should be between PPP, self-investment by the companies using money raised from charges, and other mechanisms; and on how the regulatory framework should operate. Those are important issues which we should discuss. I very much regret that, in the course of the debate, we have not discussed many of those important issues; they have not been the substance of debate because Opposition members have wanted to engage in the politics of irrelevance.
If Alex Salmond and Mike Russell want to talk about the way in which a successful referendum can be carried out, I am prepared to offer them advice on that. However, the way in which they have operated up to now is this: they have ducked the issues and gone for the easy slogans, and they have not taken on policy issues in a serious way. SNP members are excluding themselves from the real discussion about the future of Scottish water to the detriment of debate within the Parliament and of the people whom they purport to represent, as well as everybody else in Scotland.
Mr McNulty made an abrasive remark about a former Conservative minister, which I did not find particularly appropriate in this chamber.
If we are to rule out abrasive remarks about Conservative ministers, perhaps I should ditch half my speech. If anyone doubted that water was an emotive subject, one look at Mr Tosh during his outburst would have been enough to convince them otherwise. However, I am afraid that it contained more passion than constructive comment.
I will focus on the north of Scotland and on the issues that concern the Highlands and Islands, the region that I represent. Members have missed what Richard Lochhead said—it is important to put the subject of this debate in its full context. In the Highlands and Islands, that means recognising the additional cost of living, as a result of the fuel charges; the demand for local services, which the local authority settlements are going no way to meet; the problems of delivering health care; and, finally, the additional water charges.
The Government says that it wants to encourage rural and scattered communities to flourish, although it is systematically ensuring that that cannot happen. If the Government really believes in joined-up thinking, why is it impossible for it to work out a strategy that will encourage vibrant communities in those areas instead of cutting them off?
We are all agreed on one thing, at least—the investment that has been made was necessary. We all want an increase in standards and we all want to move that debate on. Where SNP members differ is that we allege that the Government has abdicated its responsibility by passing the cost of the investment entirely over to the consumer. In her speech, the minister said that the investment provided value for money. That is not value for money for people in the north of Scotland, who are facing an increase in their water bills of 111 per cent on the 1997 figure. It is not value for money for the consumer. I suggest that the Government reconsider that.
Another concern is borrowing and the external financing limits. In 2001-02, we will return to the 1996-97 levels. However, in the context of a higher overall spend, the amount that will come from revenue—in effect, from the customer—will be disproportionately high. This is not rocket science: it is obvious that the consumer is losing out under that arrangement. I suggest that, unless the Government rethinks its policy, it will discover that consumers—who are also voters—may want to comment on it either at the by-election or at future elections.
The sparse population and the particular problems that are faced within the North of Scotland Water Authority area must be taken into account. I was interested to hear the water commissioner say on the lunchtime news that there were specific problems in the north of Scotland, especially in relation to the treatment that is required for the water because of the soil. If that is the case, and if the Government's own water commissioner recognises that there are additional costs and burdens, why is it impossible to provide additional help? I make a strong plea for the special case of the north to be heard. We must recognise that there are additional costs.
Will Mr Hamilton give way?
No, thank you.
My final point concerns those who are in low-income groups. Tavish Scott was somewhat off the mark in congratulating the minister on an initiative that he said was pushing forward the debate on how we could help people from poor backgrounds or on low incomes. We are having this debate only because the minister imposed the charge in the first place. The fact that it took a parliamentary answer to wheedle out the fact that she would address this matter, but not until the summer, does not suggest to me that the Government is especially responsive. We should not congratulate the Executive on trying to resolve a problem of its own making.
The parliamentary record will show that I made a clear commitment to a review of vulnerable households in my statement to Parliament in January. That fact was not wheedled out of me by a question.
Although I am happy to debate with the minister the procedures that she used to give the information, the kernel of my question is why she should get any credit for going some way to resolving a problem that she instigated. That is the SNP's central contention, and until she addresses that point, she will not carry any SNP support.
Someone commented that there was a doctor in the house and that I should make a diagnosis about Murray Tosh. Although Murray spoke with considerable passion, I would diagnose exasperation with the SNP, which consistently fails to come up with policies that have any credibility.
No MSP would disagree that the water industry needs investment. The disagreement is about how such investment should be financed. We think that the cost should be spread among, first, the private finance initiative, which the nationalists would completely abandon; secondly, the external financing limit, which we have increased; and, thirdly, water charges. If PFI is abandoned and the EFL is not increased, how will that investment be financed? It will be financed by another of the SNP's magical bonds that do not work within the public sector borrowing requirement. That is just not on.
Dr Simpson calls the bond solution "magical". Will he account for the fact that that solution was proposed by the water authorities? Why would they make such a proposal if it was not cheaper than PFI?
There was a failure to recognise that any bond issue would still count within the financing limits, which is the problem.
I am not saying that we do not need to examine the matter carefully; I am saying that we must address it in a careful and considered way that does not try to score political points. We should accept certain basic premises on which most MSPs agree. We agree that the Scottish people are absolutely clear that they do not want the Scottish water industry privatised. We also agree that we must position our water industry to make it modern, highly competitive and able to attract the appropriate investment.
I am concerned that the English water companies have had six more years of significant investment than our companies have had, which has allowed them to modernise in a way that makes them more competitive than our water industry. Although some measures that have been introduced in the past two or three years represent a significant advance, we must address that issue. In England, the French have taken over a substantial proportion of the water industry, and other significant external investors are involved. We need to examine how to position our water industry so that it remains competitive and its base is not narrowed. Perhaps we should investigate new ways of funding that ensure that charges do not increase any more.
Scottish charges are still less than English charges. If we examine how much less our charges have been than English charges since the water industry was privatised, we will find that we have been protected in Scotland from increased charges for many years. The necessity for investment means that our charges are catching up with those in England, which is an uncomfortable process. The minister has appropriately undertaken to examine the most vulnerable group in our society. In his thoughtful speech, Tavish Scott suggested how to make savings in an area that will be retained in the public sector.
Many of us will begin to listen to the SNP when it comes up with some credible alternatives that do not rely on a rapid rise in the oil price from $10 to $30 or make demands on Westminster when the party wants to separate itself completely from the UK Government. Its motion is totally unacceptable and should be rejected in favour of the Executive's amendment.
I now call Nora Radcliffe to wind up for the Liberal Democrats.
Mike Russell made a comment about 19th-century vision and the belief that clean water supplies and proper sewerage did most for public health. Although they are assets on which we cannot put too high a price, we must put some price on them, as they require massive investment. We are operating with a Victorian structure that must be replaced—there is no way around that problem. We need the money; it has to come from somewhere.
There is no doubt that bills will rise, and I do not think that people will grudge paying for something that is so essential to our general well-being, provided that those people who have real difficulty in meeting higher water charges are adequately protected. Many of us do not like paying more, but we can afford to—we should be honest about that. We do not get owt for nowt in this world; people who can pay should pay.
The water bills that the member's constituents will receive through the post after 1 April will be 42 per cent higher than they were last year. Does she think that it is proper that the Scottish Executive is not putting a penny into the water industry to keep those bills down?
I believe that about £20 million is going into the water industry through external finance.
We keep coming back to the hard facts that massive investment is required and that that money has to come from somewhere. I do not think that people will grudge paying more if they can see that their money is going into something that is worth paying for, with the proviso that people who will find it difficult to meet those charges are protected. I am glad that we are to examine that, but I would have preferred an earlier review.
Does Nora Radcliffe share my concern that the increase in the old-age pension is 73p a week and that many pensioners will pay more than that for the increase in their water charges?
Of course I share Mary Scanlon's concern, but pensions are reserved to Westminster. We have made clear our views about that matter and I wish to move on.
Tavish Scott suggested that we should consider how the water industry works and whether there were ways of minimising the costs through more co-operative working. Fergus Ewing asked about the costs of the water commissioner. Tavish gave a sensible answer by suggesting that we should wait to see whether the water commissioner was worth what we paid him and, if not, that we should consider the matter further.
Questions have arisen about whether the present structure of the water industry is locally accountable. We must keep that matter under review. In addition, should we have equalisation of water charges across Scotland? As the Minister for Transport and the Environment pointed out, the actual cost of upgrading water and sewerage services in a small community in my area was £12,000 per head of population. We should consider whether such charges can be equalised.
A number of people questioned the balance in the way in which we pay for improvements through external finance, private partnership and charges to the consumer. We have arrived at one possible balance this year—let us see how it works and move on from there.
We are all concerned about the impact of the Competition Act 1998 on the water industry. I ask the minister to indicate her views on that point when she sums up.
We have a priceless asset that must be paid for and we are looking for the best way forward. We can do that only through constructive debate.
I call Murray Tosh to wind up for the Conservative party. Mr Tosh, you have four minutes.
I am delighted that Dr Simpson has given me a clean bill of health this afternoon. At the risk of raising fresh doubts about my sanity, I must say that I thought that Tavish Scott gave a constructive and thoughtful speech. I assure him that he will not be the only Scott in the chamber for long.
Sadly, Michael Russell is no longer in the chamber, but he suggested that I knew the value of nothing. For nine years, I heard that wee phrase across the council chamber, when I had the delight of listening to Ian Welsh throwing it at me.
I was curious about Des McNulty's comment that the issue of the Carrick Street day centre in Ayr is being addressed sensibly, although I was delighted to hear Cathy Jamieson say that something is happening that might save the Carrick Street halls. That would be very positive.
What constructive light can we put on the proposal to close Content House, to save £250,000 and to put a lot of old and frail people into a nursing home? Are we going in the right direction when the council is proposing to introduce fees for music tuition, to close its libraries one day a week and to lay off home helps?
You should stray back to water, Mr Tosh.
It was stated in the debate that the council's budget was nothing to worry about and that it was all good management. The council's financial cuts this week are already in the public arena—the issue is in the local papers—and have been put before the staff at a joint consultative committee. These cuts are a disaster, not only for that council but for many councils across Scotland.
The SNP has, in one respect, done us a favour this afternoon—it has given us the opportunity to focus on the significant cuts in local authority resources since this Government came to power. I am sorry that Jack McConnell is not here to give us his usual run round the chamber and to tell us that everything is wonderful and that there is loads more money. The simple truth is that no councils have more money. They are all having to make cuts; they are considering severe, deep and bitterly felt cuts, which will affect communities across this land.
Will Mr Tosh give details of what the Tory councillors on South Ayrshire Council propose as an alternative budget?
That is a fair debating point, which suggests that the Labour councillors in South Ayrshire are not directly to blame—it is not their fault that they have to chop £4 million from their budget this week. They must hate to do what they have been made to do. They must think back to their election promises, when they said that everything would get more money and cash would be flowing through all the public services. They must be wondering what they have let themselves in for. I do not know how one takes £4.8 million out of that council's budget. Our councillors face a nightmarish task.
When the Executive parties were in opposition, they used to say that more money should be spent on this, that and the next thing; they said that more money should be spent under every heading. We heard from Mike Russell about two matters being the two sides of the one coin. In our political culture, the Labour party and the SNP have been the two sides of the one coin. For 18 years, when it was in opposition, Labour said, "We will spend more money." Now that Labour is the Administration, it is having to answer for its decisions. That is not easy, boys, is it? Labour's role has now been usurped by the SNP, whose members come into the chamber and say that they will spend and borrow without restraint and without limit.
I must wind up now, as I am getting nasty looks from the Presiding Officer—perhaps Dr Simpson has given him worried expressions across the chamber.
The motion is an act in irresponsible posturing. The way in which the Scottish nationalists continue to present their wonderful menus of what they would spend is unsustainable, irresponsible and unsellable, as we shall shortly see.
I welcome the fact that no one in this debate has seriously questioned the need for investment in drinking water quality and environmental improvement. The Scottish Executive has faced up to how we deliver that investment and the fact that it must be paid for. However, the evidence from this debate is that some members want to have their cake and eat it. The fact is that the SNP does not understand finance. The Scottish Executive has helped—we provided £20 million in external financing limits in the previous spending round.
Will Sarah Boyack give way?
No thanks. Mr Lochhead will have his chance in a minute.
Increasing NOSWA's EFL by 50 per cent over the next two years is a practical way of providing support. The borrowing is, in itself, not an easy option as it must be repaid. The SNP's approach would create excessive debt burdens for the future.
On debt write-off, Scottish water authorities were better treated when they were set up in 1995 than English water companies were on privatisation. The comparison that Mr Lochhead gave on debt write-off was completely inaccurate because it did not include the receipts from privatisation. That meant that the net benefit for England and Wales was £1.3 billion. For Scotland it was £0.7 billion, which is, proportionately, five times more favourable.
PFI has been mentioned. It is not the cause of higher charges. It is simply one of a number of means of financing the necessary investment, at least cost to the customer and in a way that allows us to know when the work will be completed. It will enable us to meet our obligations under European directives on time and guarantee the investment in higher-quality water that we need.
In this debate, as in many others, the SNP has suggested that we simply throw money at the problem. In his concluding speech, I would like Mr Lochhead to explain how he would finance the spending commitments that he seems to be making. Those include £1 billion for debt write-off, along with a further commitment of almost £1 billion—if the SNP really intends that additional investment costs over the next five years should be met by taxpayers rather than by water customers. If water customers are not to pay for that investment and the Government is, we are the people who will have to identify where the money should come from.
I welcome Murray Tosh's support for a broader discussion on the way forward for our public water industry in Scotland.
I want to talk briefly about competition, which was mentioned by several speakers. It is important that I set out where we want to go on that. We need to ensure that our water authorities can mature and meet the increasing competition challenge. It is not the case that 1 April will be a magic date on which the Competition Act 1998 comes into force—there is already competition in the water industry, and our three water authorities in Scotland are trying to gear up for that. What matters is that they are becoming more competitive and that our water industry commissioner is suggesting ways in which they can do that.
We will no doubt hear accusations that some form of competition is a form of privatisation. Nothing could be further from the truth. The water authorities will remain firmly in the public sector, and I am confident that they will take the opportunity to show that the public sector can compete fairly and effectively to deliver a high-quality, value-for-money service. We need a public debate on that; our consultation paper next month will provide us with that opportunity.
Although water prices in Scotland are rising, they are still lower than those of the comparable water authorities that were privatised in England and Wales. We need to be responsible, flexible and imaginative in ensuring that our water authorities respond to the needs of all their customers. However, that will not diminish our right, through ministers in Parliament, to hold the industry to account in the public interest. It is absolutely fundamental that competition should operate in a way that does not threaten public health or the security of the public water and sewerage networks. That will be a fundamental condition, on which there can be no compromise.
In our consultation with the industry, we will continue to ensure that public control remains firmly on the agenda. That does not mean that we have any ideological problems with partnerships with the private sector. However, when they happen it must be with the leadership of the public sector.
The challenge is to create a modern public water industry in Scotland. Our Executive is developing Scottish solutions to Scottish problems. Tavish Scott and Nora Radcliffe made key points. We need co-operation, we need to have savings in the water industry, we need benchmarking with the best parts of the water industry throughout the UK and we need to ensure that we have efficiency of service. Every consumer, whether domestic or business, will want a higher level of service for the extra money that they will pay because of price rises. We need to ensure that we deliver that.
Our Executive will deliver investment where it is needed. We will deliver an efficient, high-quality, safe and environmentally responsible water industry that is also competitive. The Executive is committed to addressing the problems of the most vulnerable in our society. We are already doing our bit for pensioners, with our £100 winter fuel allowance, with our free television licences for the over-75s, with the minimum income guarantee for all pensioners and with low inflation at a UK level. That is the way in which to protect pensioners and meet their needs.
We need Scottish solutions to Scottish problems. Our water industry will remain public and efficient and it will deliver high environmental standards. We need the investment; that is what this Executive is delivering. I commend our amendment to the Parliament.
I call Fergus Ewing to wind up on behalf of the Scottish National party.
It is always a pleasure to watch Murray Tosh speak, because he does so very elegantly—the SNP has a problem only with the substance of what he says. What has not yet been said in this debate is that the first responsibility of the Administration when trying to ensure fair water charges—or other forms of charges—is to look for savings within the Scottish block.
During Tavish Scott's speech, I suggested that the office of water commissioner did not appear to provide any demonstrable service to the public. Does the commissioner provide technical advice? That is already provided by the water authorities. He offered advice to the minister on the level of charges. She said that that advice was moderated—in other words, rejected. If the role of the commissioner is to offer advice on what the charges should be, his role has been ignored—the increases that he suggested, which, I believe, were higher than those that the Government wanted, have not been accepted.
The first question that we must ask is why the Lib-Lab Administration has spent £1 million on setting up another quango. I have been asked that question when visiting places such as Ayr—to pick a constituency at random. People in Scotland are desperately concerned about the amount of money that is wasted on quangos, yet one of the first things that this Administration did was to set up another quango, whose purpose we do not know but whose cost we do—£1 million.
In the spirit of being helpful, I draw members' attention to another saving that could be made. I know that the Executive is aware of the possibility, because Donald Dewar informed me, on 6 March, that the cost of employing eight special advisers in the Scottish Executive was £527,207. I challenge the Executive to find one voter in Ayr who thinks that we should be spending one penny of that money in that way.
I agree with many of Mr Ewing's points but I would like him to explain what the savings that he is talking about have to do with a multi-billion pound programme of investment. He is talking nonsense.
Yes. Water, water, water, Mr Ewing.
Of course the figures that I have mentioned are not significant in this context. However, if they are added to the cost of consultancy, the cost of the quangos, which have not been subjected to real scrutiny, and the cost of bureaucracy in Scotland, they form part of a large potential annual saving.
Local government has been subjected to a great deal of democratic scrutiny, but quangos have not. I am convinced that the public agree with that statement and believe that significant savings can be found from the Scottish block of £16 billion. Instead of trying to make those savings, the Scottish Administration adopts the same policy as the Tories did—there should be no savings at all. The Tories and Labour are pursuing Jeffrey Archer's economic policy—not a penny more, not a penny less.
Why are consumers—especially those in the west of Scotland, as Duncan Hamilton eloquently pointed out—facing a 43 per cent rise in their water charges this year? The band D bill in the north of Scotland will be £300 and there will be no rebate scheme, although there will be one for council tax. Given that, and as there is no real linkage to ability to pay, I put it to the chamber that water charges are new Labour's poll tax. The difference is that there will be no back-bench rebellion when new Labour introduces its poll tax.
Does Mr Ewing agree that one way in which to save money would be for him not to ask so many parliamentary questions? I recollect that the cost to the tax payer of his questions is in the region of £30,000.
I am astonished that Brian Monteith believes what is spun by the special advisers. It is not the questions but the evasive answers that cost money. The answer that I mentioned was the fifth one that I received; why did the Executive not give the answer on the first occasion? That would save £400 by Mr Monteith's calculations, which, incidentally, I do not believe for a second.
I will move on to some aspects that have not been discussed. First, there will be a lot of investment. Will work go to Scottish businesses? What efforts have been made thereanent?
Secondly, the improved water supply involves a lot of chlorination. Is there not concern that, in some cases, chlorination leads to trihalomethanes? There is certainly concern about that in parts of my constituency.
Thirdly, does the Lib-Lab Administration accept that what it is foisting on Scotland is a form of mortgage? It is repayable not over 25 or 30 years, as one would expect if one were buying a house, but over three years. That is what is proposed and what the consumer will have to pay. Not one penny of the Scottish block of £16,000 million is being injected by the Lib-Lab Administration to abate the charges for consumers around Scotland.
Will the member give way?
No.
I am truly astonished that the Labour party, which is supposed to stand up for ordinary working people, should foist such charges on consumers in Scotland, where, many people believe, we have the best water in the world.
Fergus Ewing would tax people again.
Richard Simpson is interjecting from a sedentary position. I was pleased that he conceded in his speech that he would be interested in exploring the efficacy of the use of bonds to raise funds. He conceded that, but why have the ministers not done so? During the debate, although the minister did not answer Mr Salmond's question, we heard that the water authorities had suggested that bonds should be used. Why, then, has the Executive said no?
I will share this truth, which I believe to be self-evident, with the chamber. Although Richard Simpson and the Labour party now adore the private finance initiative—it is funny how things change—any PFI contract that I have encountered, whether it be for the Royal infirmary, the Skye bridge or Craig Dunain hospital in Inverness, has cost a fortune and has been a complete waste of money. Such contracts lead to massive interest payments for years and years. That truth will become more and more evident. Unfortunately, the people of Scotland will ultimately pay the bill.
In conclusion, Labour members have said that they resent Mr Russell's suggestion that they are laughing at the people of Ayr. I would not repeat that suggestion, but I say that Labour will be very worried about the verdict that is passed on these policies a week on Thursday.
That concludes this rather fluid debate on water charges.