Water Industry (Scotland) Bill
The next item of business is the continuation of stage 3 proceedings on the Water Industry (Scotland) Bill. We will now consider motion S1M-2675, in the name of Ross Finnie.
First, let me deal with one formal matter. For the purposes of rule 9.11 of the standing orders, I advise Parliament that Her Majesty has signified her consent to the bill in so far as it affects her interests.
Secondly, I repeat what I said in my opening remarks in the debate on the detail of the bill and express my appreciation for the work of the Transport and the Environment Committee in scrutinising the bill within the time scale that it was given. I do not believe that the committee cut any corners—quite the opposite. One of the most encouraging aspects of proceedings on the bill has been the number of constructive debates, although there have been one or two issues on which there have been differences. The result of all the debates in the committee and of the consideration of the substantive amendments this morning is a bill that will serve the customers of the water industry well in the years ahead. I acknowledge all that has been done to get the bill into its current state.
Three themes run through the bill: responsiveness and accountability to the Parliament, customers and communities; the need to improve standards; and the need to increase efficiency and commercial freedom.
At the heart of responsiveness are the new customer panels and their convener. They will provide a clear and distinct voice for the customer within the regulatory regime and, indeed, more widely, for I have no doubt that, as the panels develop, ministers and Parliament, in holding Scottish Water to account, will want to be informed by the panels.
As a result of our decisions this morning, Scottish Water will have a duty to prepare and abide by a code of practice on consulting local interests. That is a significant improvement to the bill and one for which the committee can justly claim credit. That, taken with the new reporting duties on Scottish Water and—not least—the idea of having an interim report during the year, will mean that we have the means, in the Parliament and in communities across the country, to hold Scottish Water to account in an effective manner.
On improved standards, we are equipping the new drinking water quality regulator with the powers and the independence to monitor and enforce the drinking water quality regulations. We are doing that not because standards are slipping—quite the contrary; they are improving—but because customers need the reassurance of knowing that, in this crucial area, standards are subject to proper enforcement within a clear statutory framework.
The real test for Scottish Water will be to improve standards for the treatment of drinking water and waste water across the board, while easing pressure on charges. That is where increased efficiency comes in. The whole rationale for creating Scottish Water was the scope for one authority to achieve savings that three authorities on their own simply could not manage.
We have created a single authority not just as a means to greater efficiency; we have taken the opportunity to give Scottish Water a form of corporate governance that is suitable for what will be one of Scotland's largest companies. That includes a measure of commercial freedom, to be exercised within a framework that is set by ministers, and a board with a better mix of executive and non-executive members—but with non-executive members firmly in the majority.
In short, we have reshaped the public sector model so that Scottish Water is equipped to deal with the challenges that it faces while remaining clearly in the public sector and being more accountable to ministers and Parliament than before.
This is an important bill, and the more that we have managed to get right in it, the less we shall hear about it in future. Water and sewerage services are ones that people expect to take for granted. The test is whether the remodelled industry and the revised regulatory structure can deliver an effective, silent service that provides clean drinking water and removes waste water safely, while ensuring that rises in charges are not out of the ordinary. The bill has put in place the right framework for the water industry. It can and will deliver for Scotland.
I commend the bill to Parliament.
I move,
That the Parliament agrees that the Water Industry (Scotland) Bill be passed.
At the outset of the bill's progress, in October last year, we made it abundantly clear that there would be no blank cheques and no carte blanche from the SNP for any proposals that would begin to open up Scottish Water to the private sector. We have attempted, where possible, to put forward constructive arguments to restrict the capacity of Scottish Water to allow wholesale private entry into its service delivery functions.
Section 25, which deals with the general powers of Scottish Water, alarms us significantly. The general powers provide the potential for wholesale, back-door privatisation of the industry. Within only a few years, Scottish Water could be an almost wholly enabling authority, contracting out large elements of its functions to the private sector and using special purpose vehicles to deliver services. Unison put that argument most succinctly in its briefing of October 2001, when it said:
"The powers of Scottish Water as set out in s25 are very widely drawn … The whole structure of the industry in Scotland could be changed with no democratic approval … For example, Scottish Water could turn itself into an enabling authority with all services to the public privatised using the powers in s25."
The bill contains many elements of good policy, which we support, but it is clear that the Executive has embarked on a journey that we cannot undertake with it. It is blindingly obvious that the coalition parties are not prepared to learn the lesson of the rail industry or, increasingly, the gas industry—that when private profit is involved in vital public interests, health and safety can be put at risk. There is no more important industry for public health than the water industry.
The passing of the bill will pave the way for a competition bill. The great sadness is that there is no need to follow the route to competition. The coalition parties will continue to plead that European Union directives are pushing them in that direction, but that is simply not true. There is no thrust from the EU to follow that route. Only two weeks ago, I spoke to EU staff. We have had directives on the post offices and the electricity industry, but there are no specific directives on the water industry that require competition. No: today the Executive will volunteer—with no coercion—to begin the process of privatising Scotland's water. Its approach is wrong and, ultimately, it will pay the price at the hands of the Scottish people.
I welcome the completion of the bill's progress and thank the clerks—Callum Thomson, Tracey Hawe and Alastair Macfie—for their hard work and for helping me. I also thank those who gave the evidence to the Transport and the Environment Committee on which the bill is based and I thank the civil servants for their forbearance.
The Water Industry (Scotland) Bill will create for Scotland a single water company that I hope the Parliament will be proud to have established. It will unify the three existing water companies and will deliver benefits for the Scottish people. Scottish Water should be able to raise water quality standards and deliver more efficiently high-quality water and sewerage services to a greater number of domestic and business customers. Scottish Water's creation will deliver the necessary infrastructure and investment to bring our water and sewerage services up to UK and European standards. Obviously, one must welcome that.
The creation of Scottish Water will produce a merger dividend of at least £100 million and the new company's size will result in synergies and economies of scale that are essential for survival in the competitive environment that Scottish Water is about to enter.
I have served on the Transport and the Environment Committee since last summer and have been involved in taking only part of the evidence and in stages 1 and 2 of the bill. Nonetheless, I have taken great pleasure in that work.
I believed that all members of the committee had taken ownership of Scottish Water, although I have now learned differently from the SNP—at any rate, I thought that Fiona McLeod had. Everyone in their own way has had an input to what they believe will be in the best interests of the new Scottish Water and we all wish it success. However, as we launch the company, we must not get too starry-eyed about its prospects. We must remember that its creation is a huge development, which uses taxpayers' money, and that its success is not guaranteed. The company's biggest obstacles will be Government interference and Scottish ministers' temptation to meddle and interfere excessively. That must not be allowed. Indeed, Parliament will have a duty to ensure that that does not happen. The new company must be given freedom to breathe, develop, grow and enter into a competitive market with other UK water companies.
We in Scotland want Scottish Water to rank with the best UK privatised companies, yet fulfil its obligations to its staff, the environment and the people of urban and rural Scotland. To that end, the commissioner and the consultation panels will have an important role to play in keeping Scottish Water up to the mark in respect of charging and customer care. I am certain that that is achievable.
Charities and churches will benefit in some measure after the minister's concession yesterday, although there is still unfinished business with respect to implementing the proposals of the McFadden report.
The Conservative party wishes Scottish Water well. We will watch its progress carefully and criticise it constructively if and when we see fit, with a view to delivering the best services at the lowest cost for Scottish consumers.
I welcome the Water Industry (Scotland) Bill and recommend that the Parliament passes it today.
Before I go into the meat of the bill, I say that the bill is significant. A considerable amount of parliamentary time has been spent on it. There was a pre-legislative report as well as consideration at stages 1, 2 and 3. Unfortunately, the bill does not seem to have the same prominence as the Protection of Wild Mammals (Scotland) Bill, which we passed yesterday, which says more about the media in this country than about the priorities of the Parliament. The media should have given the bill far more priority.
Like others, I recognise the contributions that have been made by many external organisations and individuals, including the water authorities, the Scottish Trades Union Congress, the Convention of Scottish Local Authorities, the Scottish Environment Protection Agency and various environmental groups. We should also recognise the contributions of the many members who have participated in the past two years or so.
The bill has three main policy objectives: to establish Scottish Water as a single, all-Scotland public water authority that is accountable to Scottish ministers and the Parliament; to establish water customer consultation panels; and to create the post of a drinking water quality regulator. One of the sadnesses of today's debate and previous debates was Bruce Crawford's contribution. He delivered a speech in which he does not really believe. He believes that Scottish Water is a public body. His speech was mere posturing. I recommend that he read thoroughly the recommendations in the Transport and the Environment Committee's stage 1 report, to which his colleagues signed up. The report welcomed proposals to establish Scottish Water as a public body.
Scottish Water will help to address several challenges: the continuing investment that is required to address long-term underinvestment and to meet the higher environmental and water quality standards that we all want; the harmonisation of charges throughout Scotland; and the need to achieve maximum efficiency in the Scottish water industry.
I will refer briefly to charities, which I had hoped to mention earlier. I strongly welcome the proposals that Allan Wilson made in the letter to the Transport and the Environment Committee yesterday. The proposals respond directly to the committee's recommendation for a more narrowly focused package of charitable relief than that which existed before. The people who reject that do not go along with the recommendations of the committee.
The bill establishes Scottish Water as a public corporation, which will be best placed to face the challenges of the forthcoming years. It is absolutely a public sector model, despite the posturing of Bruce Crawford and his colleagues.
I recommend to Parliament that, later today, we pass the Water Industry (Scotland) Bill and establish Scottish Water as a public body that is fully accountable to the Parliament and to ministers.
We have to be done by 16:21, so members should make bullet-point speeches of two minutes, please.
Bullet point one is that the SNP cannot vote for the bill, as the Executive has left too much to chance.
On privatisation, the Executive cannot put in the wee word "public" to ensure that this remains a public water authority.
On charities, I begin by saying again that we welcome the sixth, seventh or eighth concession—I do not know how many the minister has made during the SNP campaign—to have charities recognised. We welcome such concessions, but special pleading is not the answer, even when it is the SNP's special pleading that wins them.
I have a question for the minister on hospices. This morning, he talked about the ring-fenced money to pay their water charges. Will that ring-fenced money increase when, by 2003, meters are put in and their bills rise dramatically? Perhaps the minister could address that point in his closing remarks. I could give examples from every constituency, but the minister knows what charities need, as the Scottish Council for Voluntary Organisations has told him. It stated:
"SCVO remains committed to the principle that all Scottish charities should receive relief by virtue of their public benefit purpose"
and goes on to state:
"Fundamental concerns remain on the terms of the exemption scheme and the transitional fund".
The minister will not rule out privatisation, has given himself powers to install domestic meters and will not write charities' rights into the bill. Does he wonder why the SNP is not supporting the bill?
The battle against privatisation of water was won in 1994 in a major referendum, which the SNP opted out of and did not participate in. That was reinforced by the election outcomes in 1997 and 1999 and now it is put in stone by the Water Industry (Scotland) Bill and the commitment to ensure that only this Parliament can decide on the future of Scottish Water. That is a prize that was worth fighting for; it is a real victory.
It is also worth pointing out that the passage of the bill reflects positively on the Parliament. If the way in which the Protection of Wild Mammals (Scotland) Bill, which we passed yesterday, made its passage through Parliament was not a good reflection on the committee process, the passage of this bill and the process that led up to it is. The Transport and the Environment Committee led the way. It changed ministers' minds and introduced new dimensions to the argument in a positive way. The scheme that the minister has introduced, which addresses the charity sector's legitimate concerns, is a positive victory for the Transport and the Environment Committee, which highlighted the issue and wanted to see it taken forward. The fact that we now have an employee representative on the board of Scottish Water is a positive step and represents a breakthrough in the running of public bodies.
The fact that when consultation is carried out the company will have to follow a code, which requires the company to deal directly with communities rather than just make business decisions, is again a positive step that was required by the committee.
Some very good things have been done in the bill. We now have a good foundation for the future of Scottish Water and I commend the bill to members.
What we have heard from the SNP today is opposition for opposition's sake instead of a realistic approach to an important issue that faces consumers and constituents the length and breadth of the country. In the context of competition legislation, we heard nothing of an alternative from the SNP.
A single water authority will invest—and needs to do so—£2 billion in the future of water services throughout Scotland. The measures that the bill has introduced, including the ones that have been put in place during stages 2 and 3, give reassurance in a number of key areas relating to the functions and responsibilities of the new water authority. Chief among those was amendment 24, which concerned the consultation code and customer panels. I hope that it will make a difference by reflecting the concerns of business and domestic customers, local authorities and employees.
There is a huge need for capital spending in Scotland. It is important that Scottish Water reflects the needs of urban and rural Scotland. Through the efficiency savings that a single authority can achieve, it will be able to invest in the communities that members serve.
The cost to domestic and non-domestic consumers is important. The fact that water-only bills in the north of Scotland will fall by 9.2 per cent in the following financial year and that combined water and waste bills will be frozen, is a sign of the bill's approach. I have no hesitation in commending the bill to members.
I call Tommy Sheridan, to be followed by John McAllion.
Thank you, Presiding Officer. When you indicated the time scale for speakers, I thought that you were being rude, but I realise now what you meant.
I opposed the bill in the stage 1 debate and I will oppose it in this debate. The Scottish Executive has missed an opportunity. It had an opportunity to change the charging system that it inherited, which was inherently unfair and which penalised the poor, the pensioners and the low-paid. The Executive had the opportunity to introduce a fair, transparent and progressive charging system that would protect the poor and the pensioners instead of punishing them.
The Executive has missed an opportunity; I hope that it will live to realise that in the 2003 elections, when this issue and others will be raised time and again. If the Executive does not choose this moment to change the unfair charging systems, when will it change them and redistribute incomes in Scotland? Income is unfairly skewed towards the wealthy and well-paid and away from the poor and the pensioners.
I oppose the bill.
I support the establishment of a single, publicly owned Scottish water authority. I have long nursed a serious grievance about the fact that water-charge payers in the North of Scotland Water Authority area are asked to bear alone the cost burden of providing water and sewerage services in a vast area and for a scattered population. I support the bill because it will do something to put that right and to share the burden of meeting those costs.
However, I have serious reservations, the most serious of which concerns the perceived real purpose behind the bill. I believe that the purpose of the bill is not only to create a single Scottish water authority, but to pave the way for the introduction of private competition into the water and sewerage industry. That will be achieved by a second bill, which will be introduced in the spring. Scottish Water is not being established for its own sake, but as part of a framework that will allow private competition and will open the door to global energy companies. Those companies will be able to break into what they perceive as a new market and steal customers and revenue from the public sector. Members must understand that that is what the Water Industry (Scotland) Bill is about.
I do not doubt for a minute that the heavily regulated and costly part of the business—the pipelines and treatment plants—will stay in the public sector; not much money can be made out of that part of the business. The part of the business out of which money can be made—marketing and delivery to customers—will be privatised. Scottish Water will dwarf the three water quangos that it will replace, but in its turn, Scottish Water will be absolutely dwarfed by the global energy companies with which it will have to compete. Anyone who knows anything about the market and competition must know that the ruthless logic of capitalism is that the big guy either knocks out or takes over the little guy. That is what will happen in the water and sewerage industry.
I will vote for the Water Industry (Scotland) Bill, but I will not vote for the next bill, which will open up the industry to competition.
I do not want to take up a great deal of time, but I would like to take a moment to thank those who worked on the bill, particularly the committee clerks, who did a sterling job.
I believe that the considerable time, thought and expertise that many people have contributed to the discussion and debate on the issues that underpin the different aspects of the bill have produced a workmanlike end-product.
The creation of the new organisation, Scottish Water, along with the checks and balances that are contained in the bill, will allow for safe, effective and efficient water services to be delivered in a sustainable way, at a reasonable price and by a public water authority.
We have kept faith with the people of Strathclyde Region—as it was then—who reflected the wishes of the people of Scotland to retain water services in the public sector. We have created a model that will be watched with interest elsewhere and which, I believe, can and will become an example of good practice.
I commend the bill.
As one of the members of the Transport and the Environment Committee who has lasted from the very beginning of work on the bill until today, I am happy to say that I believe the bill to be fit for purpose. Notwithstanding John McAllion's reservations, I see that purpose as being to create what I believe will be Scotland's biggest public company, which will be privatisation-proof. If there is any hint of privatisation, I will certainly be joining John McAllion in fighting to ensure that that cannot happen.
I add my thanks to everybody—advisers, witnesses and my colleagues—for their work on the bill. We should have a sense of history on this occasion. I hope that the bill will be agreed to; we will have registered one of the Scottish Parliament's big achievements in the first three years of our existence.
I want to make a brief point that I would have made had the Minister for Environment and Rural Development felt inclined to accept my intervention during his speech.
The bill's policy memorandum, under the heading "Equal opportunities", states:
"The provisions in this Bill have no implications for equal opportunities. They do not inherently provide for discriminatory effects on the basis of gender, race, disability, marital status, religion or sexual orientation."
That may be true for the bill, but I want to make a point about the process. Having been through local government reorganisation, as a member of staff and as a union representative, I think that it is important to recognise that, during any transfer of staff, the principles of equal opportunities are vital and have to be adhered to. I ask the minister to comment on whether an equal opportunities policy will be in place prior to any transfer, because that was a problem at the time of local government reorganisation.
As we conclude our deliberations on the Water Industry (Scotland) Bill, I seek to maximise the political consensus that surrounds it—a cause that is presumably already lost in the case of the Scottish National Party and Tommy Sheridan.
The bill is now far better by virtue of the efforts of Bristow Muldoon, Des McNulty, Nora Radcliffe, other coalition colleagues on the Transport and the Environment Committee and non-committee members including Jackie Baillie and Tavish Scott. Those efforts were not assisted by the posturing of the SNP.
I listened to other, external interests, including churches, youth organisations and the Scottish Council for Voluntary Organisations, when we were reviewing our charitable relief scheme. I would commend to the nationalists in our midst the art of listening. They cannot hear that when we say public, we mean public. Nothing in the bill signifies a departure from our long-standing commitment to a publicly owned, publicly controlled water industry. The challenge now is for Scottish Water to vindicate the modern public sector model that we are, I hope, about to endorse.
We send Scottish Water out into an extremely competitive arena, because of the potential opening-up of the public water infrastructure to private competition. I say to John McAllion that that private competition already exists throughout Scotland in the delivery of core supply and treatment services. Scottish Water will be assisted in handling competition by the enhanced provisions that we have agreed on consultation, accountability and transparency and by a regulatory system that is robust in its defence of customer interests and high-quality standards. We must resist the temptation of micromanagement, but it is for us to hold the industry and its regulators to account.
It is my happy task to repeat my appreciation for the hard work and constructive approach of the Transport and the Environment Committee. I repeat also my personal appreciation for the long hours that Mike Neilson and his team of officials put in and for the effort that they made in helping us to pilot the bill through Parliament.
I commend the Water Industry (Scotland) Bill to the Parliament and recommend that we pass it today.