Water Services etc (Scotland) Bill
The next item of business is a debate on motion S2M-2349, in the name of Ross Finnie, that the Water Services etc (Scotland) Bill be passed.
For the purposes of rule 9.11 of the standing orders, I advise the Parliament that Her Majesty, having been informed of the purport of the Water Services etc (Scotland) Bill, has consented to place her prerogative and interests, so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.
This is an important week for the water industry in Scotland. Later this afternoon, my colleague Lewis Macdonald will set out our objectives for the industry and the principles by which the cost of those objectives will be distributed between customers. Also today, Parliament has the opportunity to put in place the coherent legislative framework that will underpin those objectives. The provisions in the bill will ensure that the industry enjoys stability in which to carry out what we ask it to do. The provisions will also deliver a robust regulatory regime that can secure those objectives with maximum efficiency.
By replacing the current individual economic regulator with a water industry commission, the bill strengthens the regulation of the industry, introduces more accountability and transparency and ensures that the appropriate expertise is brought to bear in regulatory decisions. Using its new powers of charge determination, the commission will decide how much it will cost Scottish Water to efficiently deliver all that we ask of it in today's statement. It is certainly appropriate that an expert body should be responsible for that calculation, which is central to the functioning of the industry. Equally important is that we as a Parliament and politicians take responsibility for deciding the principles of charging customers. The bill will ensure that that role remains firmly with ministers and the Parliament.
In addition to the strong regulation introduced by the bill, its provisions will protect public health, the environment and vulnerable households. With such fundamentally important priorities at stake, I am pleased that those provisions have remained largely unchanged since they were debated at stage 1. The bill still ring fences Scottish Water's core functions of providing water and sewerage services to all customers on the public networks, and prohibits anyone else from doing so. That safeguards public health and the environment, and provides certainty for Scottish Water to concentrate on delivery.
Stability is also the aim of the licensing regime that is set out in the bill. It will ensure that, if retail competition in the non-domestic sector develops, it will be strictly regulated. Amendments were made to the bill at stage 2 to ensure that the transition to competing in that small part of the market is as smooth as possible for Scottish Water. The bill now provides greater flexibility for Scottish Water to choose an appropriate model for its retail undertaking, subject to ministers' approval, and for a wide range of funding mechanisms to be available. That will help to give Scottish Water's retail undertaking the best possible chance of success.
At stage 2, important changes were made to the bill to improve customer representation in the industry. Those changes will ensure that water customer consultation panels will be involved in the process by which customer charges are set, by requiring the panels to be consulted on key issues for the industry. The panels also gain stronger powers to address reports to any of the key players in the industry—to Scottish Water itself, to Scottish Water's regulators or to ministers. In addition, following constructive debate at the Environment and Rural Development Committee at stage 1, the bill was amended to give the convener of the panels responsibility for handling customer complaints.
I am pleased to announce that in future the water customer consultation panels will be known as waterwatch Scotland, which I hope members will agree is somewhat snappier and more recognisable than the original title. We believe that it will help customers to clearly identify where they can take issues relating to the water industry, and will help the panels and their convener to become a one-stop shop for all customers' concerns in relation to their water services.
Can the minister assure Parliament that, notwithstanding the complaint mechanism that he outlined—I welcome the reforms that have been made—accountability and responsibility for the management and direction of the water industry will remain firmly in the hands of ministers, and that the power of ministerial direction to Scottish Water and other organisations within the industry will reflect the wider priorities of the Scottish Executive and what Parliament expects ministers to deliver in those areas?
I am happy to give John Swinney that assurance. The point he raises is exactly what the bill is about. We have created an almost unique structure within Scottish Water in terms of publicly owned companies, whereby ministers of Parliament clearly set the strategic direction that Scottish Water is to follow, consonant with the overarching policies of Parliament and the Executive. However, we leave the management and board of Scottish Water to deliver. In the public interest—because Scottish Water is a publicly owned body, and therefore not effectively subject to overall competition—we have the water industry commission. On behalf of customers—be they domestic or non-domestic—it will seek to ensure that Scottish Water performs to standards that would be recognised within a competition framework elsewhere. The ability of Parliament to feed into that process is important.
I raised earlier the question of being given powers to develop a statutory code for the control of sewage nuisance, which I know will be welcomed by many.
The Water Services etc (Scotland) Bill will ensure stability for the future of Scottish Water as the publicly owned provider of water services in Scotland. It will provide a strong regulatory framework that will allow Scottish Water to deliver ministers' requirements efficiently, in the interests of customers. It gives customers a central place in the industry, ensures that their voice is heard at all levels, and proposes a firm solution to the problem of odour from treatment works, which the affected communities will welcome. The bill takes us forward again in improving the delivery of water services in Scotland.
I move,
That the Parliament agrees that the Water Services etc. (Scotland) Bill be passed.
The Scottish National Party welcomes the fact that our water supplies will be delivered publicly, but we believe that much of the bill has to do with competition legislation and ensuring that we do not have to open the Scottish water industry to full competition, which the SNP has opposed for many years.
We are glad that the Executive has not gone for full competition, but the well-known needs of domestic and non-domestic customers must be met and many of them will have to be met in quality and standards III, about which we expect to hear more later. The bill is only a limited way to ensure that the framework is suitable for delivering those needs. We are delighted that there will be no common carriage and that the public water delivery system will be maintained.
We welcome the statutory code on odour nuisance. We acknowledge the petition on water treatment plants that Susan Deacon shepherded, and pay tribute to the Public Petitions Committee and the Environment and Rural Development Committee for the work that they did on getting that valuable code, which was not contemplated at the outset, inserted into the bill. Although that is excellent, the bill cannot deal directly with development constraints, which require considerable investment, and we look forward to the introduction of the means to address that issue in due course.
We are also pleased that the customers champion—the WCCP—will have a snappy title. I attempted to get the idea of a snappy title accepted at stage 2. The combined brain power of the civil service has clearly thought that waterwatch Scotland is such a title, and that is to be welcomed.
The powers to control coal mine water discharge have been uncontroversial, but are essential for many communities in the coal mining areas of Scotland, and we welcome the inclusion of those powers in the bill.
We wish the water industry commission well. We believe that the public will have more confidence in its deliberations and that it will be a more transparent means of regulating Scottish Water's enterprises.
We are happy to welcome the bill, despite its limitations, and give it fair passage to becoming an act.
There is much that the Conservative party can welcome in the bill. In setting up the water industry commission, part 1 in particular goes some way towards alleviating the pressures that we experience not only from water buyers, but from individuals who are concerned about how charges have been regulated across the board. By putting in place a system that will allow those people to be properly heard and represented, we have gone some way towards ensuring that some of the anomalies that we have suffered in the past can at least be addressed, if not eliminated. Therefore, I welcome part 1 of the bill.
Part 3 of the bill is also largely uncontested. Having questioned a number of interested parties on it during the Environment and Rural Development Committee's stage 1 inquiry, I am satisfied that part 3 is in the bill for the right reasons and I am happy to support its inclusion.
However, the Conservative party continues to have serious problems with the ideas behind part 2. As has been said, part 2 has the effect of concentrating power in ministers' hands and, as a result, our water industry is likely to remain policy led, not, as is necessary in many areas of Scotland, demand led. During the committee stages and again today, the minister talked many times about the necessity for the industry to mimic the benefits that can be achieved through competition in a marketplace. However, he has never given me an adequate explanation of why the solution to the problem is not to deliver real competition.
The water policy as set out under part 2 of the bill is designed to retain the procedures by which water charging equates to a system of taxation throughout Scotland. It relies heavily on how water is charged, so that one individual cross-subsidises another. If we are to use water services provision as a system of taxation, which is without doubt what we are doing, there will inevitably be conflicts between those who use far more water than they are willing to pay for and those who pay for far more water than they ever use.
The opportunity to address such issues in part 2, even to a limited extent, has been avoided for largely ideological reasons and therefore the Conservatives cannot accept it. To a lesser extent—although this is equally important in particular areas—the bill leaves those at Scottish Water as the de facto planning masters in large areas of Scotland. By keeping power and funding in the hands of the minister, the opportunity to address many of Scotland's problems has been missed. Development is now seriously constrained as a result of the shortage of water and water services provision, which must be solved by other means.
The view that has been expressed on common carriage at every stage—for some inexplicable reason—has been that public is good and private is bad. Whether services are in public or private ownership does not directly affect the ability to ensure that water is clean and hygienic. The implicit assumption that private companies cannot live up to such standards is something that many people in industry—even beyond the water industry—will be offended by.
There are positive aspects to the bill, including provisions to deal with the odour given off by water treatment works. Although we welcome the inclusion of those provisions, we cannot accept the political implications of part 2.
I am pleased to support the bill, particularly as I am following Alex Johnstone. He said that the bill is political. It is indeed political, and we are very proud of that—we think that the bill does the right thing. Labour members are clear that we need a stable framework for investment for the water industry in Scotland, both to tackle the backlog and to set out a new framework for the future.
We need to maintain safety, to ensure that human health is a core principle for Scottish Water and to be confident that public health standards are met, regardless of where people live. We are also clear that it must be possible to retain social justice principles in the system. There are issues around affordability, which we debated at length in committee. That is why people need the framework and the protection offered by the bill. I am delighted that we have reached this stage, and I am not at all surprised that scrutiny of the bill has been relatively straightforward. I am sure that this will be a brief debate, as only the Tories stand out against the consensus. It is right that we pass the bill today.
The Environment and Rural Development Committee had much discussion about the bill at stage 2 and we welcomed the Deputy Minister for Environment and Rural Development's contribution and his ability to engage with the issues that we raised with him. On every occasion, we got the right answer—we cannot always say that, judging from some of the difficult debates that we have held in the chamber in the past.
The provision of water services is vital to us all, and the regulation of that needed to be modernised. The minister focused on how complaints are properly dealt with, which is vital to the bill, and I hope that the clarity that the bill will bring in that regard will help domestic and private Scottish Water customers. It is important that we now have a clear framework.
As consumers, we expect that, if we have a problem with the facilities that are provided to us, we will know to whom to complain, that our complaints will be dealt with effectively and properly and, crucially, that they will monitored. The new title of waterwatch Scotland, which the minister established today, is welcome. It is straightforward and easy to understand. I hope that, once the bill is passed, there will be publicity that people can relate to and follow.
It is important that people complain first to Scottish Water, but the new framework will give them a backstop of somebody else to take on board their concerns. Scottish Water already monitors its own complaints process, but the third-party approach is important in raising standards. We spent a great deal of time debating that in depth in the committee and I am glad to say that, in effect, we all supported the minister's proposals.
The other big thing that the bill does, which was subject to amendment at stage 2, is address sewage odour. We know that that is not an easy problem to fix. My colleague Susan Deacon will speak on that at length, but she is not the only member who has had problems reported to her. We received a series of petitions from areas throughout Scotland where sewage odour is a problem. That is partly to do with the historical location of our water and sewerage facilities and the expansion of our villages, towns and cities. The problem needs to be addressed now and the committee welcomed the statutory provision to do so.
The other important aspect of the bill is that it gives us a stable platform for future investment. I hope that the minister's statement later this afternoon will highlight future opportunities, but we need to ensure that the industry is stable for the future. The challenge is to make the whole system work in all our interests. The bill is vital to Scotland's future in terms of our economic prosperity, social justice and ensuring that we set high environmental standards.
The biggest element of our water bills is the fixed costs, which are determined largely by the investment programme, which in turn should be determined as a public resource for us all. That investment programme should be determined after consultation between ministers, local authorities and the businesses that are able to deliver for Scotland's economic future.
The bill will give us the framework. What we need next is the minister's statement. Without the bill we would not have the proper framework for investment that I hope the Executive will set out clearly in the statement. We on the Labour benches support the bill fully and we are glad to be debating it at stage 3.
Three members wish to speak in the open debate. I call Mark Ruskell, to be followed by Frances Curran and Susan Deacon.
The Scottish Green Party will support the bill. I found the process of scrutinising it constructive and I am pleased to see the Executive's response to the committee's concerns and to the public petitions on odour nuisance. When the three elements of people, Parliament and Executive are responsive to one another, the Scottish Parliament is definitely working at its best.
Ultimately, the Executive has had to strike a difficult balance between the pressures to privatise public services as a result of the Competition Act 1998 and to keep them fully under the control of those whom they serve. Despite being uneasy about any form of water privatisation, including even the billing component of the sale of water to businesses in Scotland, the Green party acknowledges that the bill will provide a backstop to prevent further privatisation. To play fast and loose with the bill by blocking any element of competition, however small, could have led to multinational companies determining the structure of the Scottish water industry through the courts, rather than having the Parliament remain in control.
I welcome the Executive's response to particular concerns voiced by me and by other members of the Environment and Rural Development Committee that Scottish Water's sustainable development duty was not being fully reflected in the role of the water industry commission and the new entrants to the billing service. I was pleased that the Executive lodged amendments at stage 2 that provided welcome joined-up thinking on the issue.
As we have heard, the bill has been a useful vehicle to deal with the responsibilities relating to coal mine pollution as well as odour nuisance from sewage works. I am an ex-resident of Susan Deacon's constituency and my role as an MSP covers Fife, so I know about the sheer frustration of the local petitioners about the issue and about the lack of an enforceable code of conduct. The opportunity that the bill provides to address odour nuisance might not have come around again for quite a long time. It is important that we have been able to use the bill as a vehicle to get the issue tackled.
The delivery of water services in Scotland is about striking a crucial balance between the economy, the environment and social justice. Those three drivers need to be at the heart of the development of our water services. I am content that the bill offers a structure to enable that balance to be struck and controlled by the Parliament.
The Scottish Socialist Party will oppose the bill. That might not come as much of a surprise, because we are committed to the public ownership and sale of water.
What is the bill about and why on earth is it before the Parliament? The real reason is that water is already privatised in England and Wales and there is huge pressure internationally—and particularly through the European Union—to force water into the private hands of international water companies, which I hope that the Scottish Executive will resist. What is happening is that the sharks of the international and multinational water companies are circling around Scottish Water, which is not yet fully privatised.
It is not privatised at all.
The bill allows those companies to take a private sector bite out of Scottish Water. We oppose the bill because it represents the thin end of the wedge. Further, that would not be the first such bite, because private companies have already been nibbling away.
Will the member take an intervention?
I have only four minutes; I might give way later.
Through private finance initiative projects, private companies have already been nibbling away at our water provision and are set to profit from the investment that Scottish Water is making in the new infrastructure. It does not matter what the Labour members say, once this bill is passed, private companies—the licensing of which will have cost us, according to the Finance Committee, between £10 million and £18 million—will be selling water in Scotland to make a profit. That is the outcome of the bill. The point is not who those companies are selling to. The Executive might have held to the line that only business customers, not domestic customers, will be in the loop, but that is just the beginning of the road to privatisation.
We do not need the bill. The Executive should have considered international models of public ownership and chosen one that allows the workers in the industry or the people of Scotland to invest in the infrastructure and retain public ownership of Scottish Water.
Could Frances Curran explain exactly which sections of the bill the socialists believe would give the private sector the capacity to take over in the way that she describes?
The private sector will be given the opportunity to sell water privately on the market in Scotland. That is the outcome of the bill. The Executive is patting itself on the back because it backed off from common carriage, but I think that I can hold my breath until that position is reversed.
Hear, hear.
And the Tories are in favour of that.
The bill allows private companies to be licensed to sell water in the Scottish market. That is the direction that the Executive is taking. The only alternative is a public ownership model in which the people of Scotland own Scottish Water. Members are either in favour of selling the rain to international capital for it to profit from, or they are not. Scotland needs a public model and the bill makes a mockery of the Strathclyde referendum.
We want public ownership, public control and public regulation of the water industry in Scotland.
I reassure the Presiding Officer and my colleagues that, contrary to what Sarah Boyack said earlier, I do not plan to speak "at length." I know that I would not be allowed to do that. However, I make no apology for speaking with some pleasure and a sense of achievement—not personal achievement but the achievement of this Parliament and many communities—at this bill being before us today. I am particularly pleased that section 19B of the bill exists and that, after the vote today, the law of Scotland will have provision for a code of conduct on sewerage nuisance—in other words, we will be able to do something about the dreadful smells from sewage works that have for a long time brought suffering to many communities across Scotland.
Will Susan Deacon join me in thanking the many constituents in my constituency and across Scotland who brought this issue—known in my area as the Pathhead pong—to the Public Petitions Committee? I would like to acknowledge the way in which the Public Petitions Committee enabled communities to take the issue forward.
I happily join Marilyn Livingstone and other colleagues in congratulating the many people throughout Scotland who have brought the matter to our attention. Indeed, I want to focus on people whom I would like to thank.
First and foremost, I thank my constituents. Almost three years ago, residents of Leith links brought a petition before the Parliament. With absolute tenacity and considerable imagination, they have ensured that I and many politicians here have heard at first hand how their community has been affected by the Seafield stench. However, I recognise that we are not alone—Marilyn Livingstone and Christine May mentioned that. The Pathhead pong and the Methil ming—to name only two other examples—came to light during the petitions process. One reason why there is such a sense of achievement in the Parliament today is that the bill provides another example of a change to our law that can be traced back to a petition that was brought to the Parliament's Public Petitions Committee. No such mechanism is available in any other part of the parliamentary process in the United Kingdom. I thank the convener of the Public Petitions Committee, Michael McMahon, and his predecessor, John McAllion, as well as all that committee's past and present members for taking the matter seriously.
I pay tribute to the Environment and Rural Development Committee, and particularly to its convener, Sarah Boyack. That committee has again shown that our committee process can create a vehicle for voices to be heard and that a matter that might initially seem to be a local one can, in fact, be of national concern and require national action.
I pay tribute to ministers and thank them for acting on the matter. That has taken rather longer than I would have liked, but we are there and I am absolutely delighted. In particular, I pay tribute to Allan Wilson, who has moved on from his previous role, but who worked constructively with the committee and with me, publicly and behind the scenes, to make progress.
I also pay tribute to Scottish Water, which I have hounded as much as anyone on this and on many other issues. I recognise its efforts in seeking practical solutions and in making progress on the regulatory regime and the debate surrounding that regime. Scottish Water has achieved a huge amount in developing our water and sewerage infrastructure in recent years.
I am pleased that odour will be taken more seriously in future. The Parliament's role is to listen to people and to act directly as a result of their experiences and concerns. Today has produced a practical example of our doing so. I thank the Parliament for giving me the chance to underscore those points.
I am much happier with the bill than are the Tories or the socialists, so I will probably not need four minutes.
The bill is the third in a series of bills that have sought to implement the water framework directive and to reform Scotland's water industry through setting up Scottish Water and the framework within which it works. The bill has revisited and will fine tune some earlier arrangements; it will give clear powers to Scottish ministers to set Scottish Water's objectives and the principles that it is to apply in setting charges, and it will replace the single commissioner with a commission. It will also enhance and rename the customer panels and improve the complaints procedure by re-routing second-line complaints to the office of the convener of waterwatch.
The main purpose of the bill is to enable Scottish Water to meet the requirements of competition law while keeping faith with the people of Scotland who want to retain Scottish Water as a publicly owned body that can apply the principles that Sarah Boyack and Mark Ruskell outlined. The inclusion of measures to deal with odour nuisance is a welcome addition to the bill. Those measures are the long-awaited successful outcome of a campaign that was spearheaded by Susan Deacon. As we have heard, the measures will benefit communities throughout Scotland.
The bill has had a smooth passage. All parties have engaged in constructive dialogue and the Executive has been willing to take on board the committee's recommendations.
It gives me great pleasure to support the motion to pass the bill.
Before I call the minister to speak, I thank Alex Johnstone and Rob Gibson, who have declined to speak again in the debate, which means that we will catch up our time. I call the minister to speak—I have probably caught him on the hop.
It is very kind of colleagues on the front benches of other parties to give me the opportunity to speak even sooner than I had anticipated.
It has been a good debate—short and to the point—and I thank members sincerely for the contributions that they have made today and during earlier stages. With my colleagues, I am especially grateful to the members of the Environment and Rural Development Committee for their thorough and helpful consideration of the bill at stage 1 and for their support for the amendments that we lodged at stage 2 in response to their stage 1 report. As we have heard, those amendments have produced benefits both in boosting the powers of waterwatch Scotland and in providing a statutory basis for action to deal with odour and other sewerage nuisance. I also thank the Finance Committee and the Subordinate Legislation Committee, which carefully and constructively considered the bill. The role of the Public Petitions Committee has already been mentioned.
The process was strengthened by all those who took part in the consultations on the bill and who submitted evidence to the committees. Whether they represented consumer groups or businesses, local authorities or regulatory experts, they all contributed to the bill. Some of that input came from those who run our water industry day in, day out. Those include Scottish Water, the water industry commissioner for Scotland and other regulators, and the convener and members of the water customer consultation panels, which are soon—happily, as we have heard—to be known as waterwatch Scotland. I thank all those who have been involved behind the scenes in drafting the bill and in supporting the parliamentary process, and I thank the Presiding Officer for accepting manuscript amendments late in the day.
As has been said, the bill's passage through Parliament has been remarkably smooth. That may have surprised some commentators, but it reflects the broad consensus that exists—in spite of the dissent at the ideological margins—around our policy in support of the water industry. It is important to remember what we are seeking to do. The bill protects Scottish Water and public sector delivery of water and sewerage services and provides a measured response to the Competition Act 1998. It sets out clearly that the carriage and delivery of water and sewerage services will continue to be the responsibility of Scottish Water. That protects public health not because, as Alex Johnstone suggested, we think that the private sector is reckless in such matters, but because there is a self-evident and defensible case for saying that water and sewerage services are most safely and surely delivered by a single public sector provider.
The bill sets out just as clearly that household customers will continue to buy their water only from Scottish Water. It provides a licensed, orderly and managed way to introduce competition for retail sale of water to businesses, but it also provides the stability and certainty that Scottish Water needs to continue to deliver its vital services in the years ahead. The SSP talked about multinational water industry sharks "nibbling away", and about European Union pressure to privatise Scotland's water. Frances Curran wants Scottish ministers to resist that pressure to privatise. I assure Parliament that, if we ever get pressure to privatise from that direction, we will resist it; however, no such pressure exists. In the meantime, the SSP will have to go fishing for sharks somewhere else.
We have a broad consensus around the proposal for Scottish Water to continue as a public sector water and sewerage services deliverer. The changes that the bill makes to strengthen the regulatory framework and to set a transparent and accountable system for determining Scottish Water's objectives and charges have been welcomed. As Sarah Boyack said, the bill sets the scene for the statement that I will make later this afternoon on Scottish Water's investments and the principles of charging. Those objectives will determine what Scottish Water delivers; it is important that that delivery is affordable to customers.
If the Executive can make concessions to small businesses by restricting cost increases to 2 per cent, is not it time that it considered restricting cost increases for senior citizens at least to the rate by which their pensions increase, which is the rate of increase of the cost of living?
Although the bill sets the context for the statement that I will make later this afternoon, I know that members will not expect me to anticipate that statement. I am sure that John Swinburne will make a point of being here to listen to what I have to say on those matters at that time.
Scottish Water was created three years ago in response to the need to bring greater economic efficiencies to bear on our water industry. Since it was established, it has reduced its operating costs by more than £1 million for every week that it has been in existence. That is clear evidence of the capacity of the public sector to deliver efficiency. The framework that is provided in the bill will continue to provide the economic rigour that will ensure that Scottish Water continues to deliver the efficiency its customers deserve. I commend that framework and urge members to support the motion.