Water and Sewerage Charges
The first item of business is a statement by Mr Sam Galbraith on water and sewerage charges. There will be questions at the end of the statement and therefore no interventions during it.
On a point of order, Presiding Officer. I seek your guidance. During the drug courts debate on 2 November, you said on the issue of matters appearing in the press before we hear about them in the chamber:
"We do not expect to read in the newspapers what will be said in Parliament—we expect to read what has been said
. . . I take the issue seriously. If we allow the situation to continue, it will damage Parliament".—[Official Report, 2 November 2000; Vol 8, c 1259-60.]
I draw your attention to the fact that in today's Edinburgh Evening News there is a prelude to the statement that is about to be made in the chamber. I am aware that the item was carried by the BBC this morning and I have in my hand a copy of a press release that was issued by the Executive at 12.36 pm. In view of your earlier rulings, I would be grateful if you would investigate this matter, make a ruling on it and do what you can to stamp out this practice. What is the point of paying a ministerial salary if the Executive can go straight to the press instead of being answerable to the Parliament?
If you let me have copies of the article and press release, I will certainly investigate the matter.
Earlier this year, Sarah Boyack announced that the Executive would look at ways of helping those on lower incomes to deal with increases in water and sewerage charges. That announcement reflected our concern about the impact of the increases on vulnerable groups in the community.
The water and sewerage service has suffered from a serious lack of investment for many years. To improve the quality of our water and to fulfil our EU obligations on both water and sewerage, an investment of at least £1.8 billion is required. That has resulted in increased charges.
Although the increases have undoubtedly been unwelcome, I am not aware of any respectable arguments against the investment as such. There is general agreement that our water and sewerage infrastructure needs to be put on a sustainable footing for the long term. Everyone benefits from the investment. As customers, we get higher-quality drinking water and less risk of interrupted services from burst mains and collapsed sewers. We also benefit from a cleaner, safer environment, in which waste water is properly treated and disposed of rather than being allowed to foul our rivers, beaches and coastal waters.
For most of us, the charges represent a fairly small item of expenditure in our domestic budgets. For a family on average income, the combined water and sewerage charge amounts to about 1 per cent of weekly household expenditure. However, the proportion is higher for those on lower incomes, and that is why the arrangement linking the water charges to council tax bands is important. That link means that those living in lower-banded properties pay less than those in higher-banded properties. Thus, a band A property will pay only one third of what a band H property pays and only two thirds of what a band D property pays.
About 85 per cent of those receiving council tax benefit live in band A or B properties. By definition, those are lower-income households. As a result of the link, they already pay reasonable charges for the services that they receive. Band A households in the west and east of Scotland water areas pay less than £3 a week for those services. On top of that, 25 per cent discounts are given for single- adult occupancy, in line with the council tax discounts. That is further assistance, delivering even lower charges for some of the most vulnerable, including single pensioners and single-parent families. For example, the charge for single-adult properties in band A in the east and west areas is less than £2.20 a week.
Will the minister give way?
No, I am making a statement.
There should be no interventions during a statement.
Those figures illustrate the strengths of the current arrangements in protecting most lower-income households from the worst of recent increases. However, the arrangements provide less assistance to two groups of lower-income households.
First, we must consider those who live in the areas served by the North of Scotland Water Authority. The challenges facing that authority in upgrading its infrastructure and serving a wide and sparsely populated area are well known and are reflected in charges that are higher than those elsewhere in Scotland. Although it is worth pointing out that the charges are by no means the highest in the UK, the fact remains that households in band A properties in the north pay about £50 a year more than those in band A properties elsewhere in Scotland. For those in higher-banded properties, the difference and the impact of increases are even greater. We recognise that the position in the north is different and needs to be addressed.
The second category covers people on lower incomes in higher-banded properties across Scotland. For them, charge increases are obviously a greater burden than for people in similar circumstances in lower-banded properties. That group is also in a difficult position and needs help.
I am now able to outline our proposals for a scheme to cap the amount paid in water charges by those on council tax benefit. The Executive will fund the scheme at an estimated cost of £24 million over the next three years.
The detail of how the scheme operates will be considered in a consultation exercise that I am launching today. The broad intention is to help those receiving council tax benefit—wherever they live in Scotland—to deal with the transition to increased water charges. The limit on charges for next year will be announced later, but I expect it to be between £180 and £200. That means help to households on lower incomes by guaranteeing that none will pay more than £3.85 a week for water and sewerage services next year.
In seeking to assist those groups, we are keen to deliver help as simply as possible. We do not propose devising a separate means of identifying those who need help. Instead, we will work on the basis that eligibility for council tax benefit—the most widely claimed benefit—is a broad indication of low income and represents a reasonable qualification for benefiting from the cap on charges.
The local authorities are well placed to deliver help. As they already collect water and sewerage charges for the water authorities and administer council tax benefit, they have the systems and the information necessary to administer the scheme. We will be discussing the details of implementation with them as part of the wider consultation exercise. I am confident that we can co-operate in developing a system that delivers help to those who need it and that is cost-effective, straightforward and easy to operate.
We must consider this in the wider context. As I said, specific help to deal with increases in charges can go only so far in helping those on lower incomes. What is required is a more wide-reaching approach to promoting social inclusion—that is what the Executive and the UK Government are working to deliver.
The Executive has announced plans for pensioners' concessionary travel and its scheme to help households install central heating. The Chancellor of the Exchequer is also providing assistance for working families and pensioners, including the increases to pensions and winter fuel allowances that were recently announced.
The cap on water charges fits into our broader social justice strategy, progress on which we will debate later this afternoon. It is a further measure aimed at delivering help where it is needed. I am sure that the scheme will be welcomed by those who are most affected by rising charges and by those who speak for them, and I commend it to the Parliament.
We now come to questions for the minister. Members who wish to ask a question should press their request-to-speak buttons now.
I warmly welcome today's statement, which was long overdue, from the new Minister for the Environment, Sport and Culture. I am delighted that the Executive has adopted yet another SNP policy. The statement was not so much a ministerial statement as a confession of guilt that the Government has failed low-income households in the past few years, given that water bills in Scotland have risen by more than 200 per cent since Labour came to power. However, better extremely late than never.
The scheme that was outlined in the statement is welcome. It will help the North of Scotland Water Authority, which has been hit particularly badly by rising water bills. However, it appears to members of the SNP that the scheme offers little to water customers in the east and west of Scotland.
Will the minister confirm that householders who live in a band A or band B property in Glasgow and who receive council tax benefit will not benefit from the scheme? Is not it the case that the scheme will treat the symptoms rather than the root of the problem, given that the Government's policy has forced water authorities to raise their income through water charges so that vital investment can be made? Will there be a long-term change to that policy? Will the Labour Government continue to force a tap tax on low-income households in Scotland?
I hoped to get a slightly better response, but it was not forthcoming. I was rather disappointed by Richard Lochhead's girning attitude, but I suppose that we always expect that. My statement contained good news, but the nationalists would not have liked that at all, as they are interested only in bad news.
Richard Lochhead did not ask many questions, but tripped out a collection of soundbites that the SNP's spin-doctors will be able to pass round the press later. However, I will answer his specific question on whether the scheme will help those living in the east and west of Scotland. Yes, it will—the scheme's benefits will be available to recipients of council tax benefits who live in the east and the west in Scotland, except those who live in band A properties. The scheme will benefit those who live in properties that are in the upper bands, but it is not available for band A properties because people who live in those properties pay well below the cap, which will be set at about £3.85. A single person in a band A property in the west of Scotland pays £2.20; two-person households pay about £2.95. The scheme will benefit vulnerable people throughout Scotland but, in light of the difficulties experienced with a small customer base that covers a large area, it will particularly benefit those who live in the north of Scotland.
The charges were increased because of under-investment over the years, for which we must now pay. The problem is one of short-termism. The coalition looks to the long term—that is what our approach is all about.
I, too, welcome the new Minister for Environment, Sport and Culture to his first statement. I thank him for the advance copy of the statement—such courtesy is always appreciated. I also thank him for the fact that, quite unusually, the consultation paper has been provided before the minister gave his statement.
I have two questions for the minister. From the consultation paper, it appears that the Executive proposes only a transitional scheme, which will finish in 2004. The consultation does not appear to include proposals for the long-term protection of what Mr Galbraith described as the second category of low-income households—those people who live in larger, or higher-band, properties and who have low incomes. Will the minister confirm that that is the case?
Given the minister's recent experience of software issues, what steps has he taken to establish that local authorities will be able to deal with and administer the scheme? He must be aware of the severe dislocation experienced by many local authorities in recent years when they have combined council tax benefit and housing benefit payments. Is he absolutely certain that the authorities will be able to deal with the scheme? In particular, how will authorities deal with the artificial cut-off that the cap represents? The Parliament would appreciate some cast-iron guarantees that the scheme will work.
I thank Mr Tosh for his comments and I am grateful for what he said about providing him with a copy of my statement.
The cap will be decided once we know what the proposed charges are. It is important to set the cap to make it as administratively sensible as possible, so that question will be answered later. We are confident that councils can deal with the matter, but we have told them that any genuine expenditure resulting from the process will be directly reimbursed by the Executive.
The arrangement is indeed a transitional one. It is for three years and no one has their public expenditure laid down for more than three years. I think that that is a reasonable basis on which to operate. The scheme will deal with all the groups that need to be dealt with: everyone on council tax benefit throughout the whole of the north of Scotland, and those above band A in the east and west of Scotland.
I welcome the minister to his new role; it is good to have him. I also welcome whole-heartedly the statement that he has made today and the progress that is being made on the Executive's commitment to alleviating the burden on those who have been hardest hit by the increased water charges. The minister said that he will be discussing the details of implementation with the local authorities. Local authorities, as well as NOSWA customers, have their own financial difficulties to contend with. Will his discussions include the costs to local authorities of implementing the scheme, and will the Executive pick up those costs?
That is part of the consultation. I have spoken to the Convention of Scottish Local Authorities today to reaffirm that genuine cost increases involved in implementation will be paid for by the Executive.
I welcome what the minister said about targeted support and his recognition that, in the interests of public health, water treatment standards must be improved throughout Scotland. What is the expected size of the average water and sewerage bill after the proposals are introduced and what average saving is anticipated per household?
Mr McNulty is right to mention public health; that is what this is all about. Contrary to the myth, Scotland's water is not the most perfect in the world and much has to be done to it. We often say that it comes straight from the mountain to our taps, but that is perhaps the problem—it does not pass through any of the necessary treatment stages in between. We require the investment to deal with that.
The savings for each household will vary, but I can give some examples. In the north of Scotland, for instance, the saving for a band A household might be about £40 a week and the saving for a band D household £100 a week. Average costs also vary. In the west of Scotland, the charge for a band A household is about £149. In the north of Scotland, it is about £200 and, in the east of Scotland, it is about £151. However, relief will be available. Those are the sort of average costs that will result, with significant savings.
I welcome the minister to his new brief and wish him well in his efforts over the next few years. I also thank him for sending me a copy of his statement and the booklet, which I have not yet had a chance to peruse.
The minister said that £24 million would be made available over the next three years to fund the scheme. Can he confirm how much a week will be available in water benefit as a result of the proposals for those who are currently receiving council tax benefit? Some of the figures that have been presented to me suggest that water benefit could be as low as 75p a week for those who also receive council tax benefit. How many households will benefit and how has the figure of £3.85 been calculated? Where did the £24 million come from? Is it new money or has it come from another programme? If it has come from elsewhere, which programme has it come from?
The minister also mentioned his intention to go to consultation, which is laudable. If the consultation process shows that he does not have enough invested, does he have any flexibility or additional resources that he can apply to the scheme, or is the writing already on the wall, leaving the consultation exercise a bit of a sham?
The decision has been made that we will make that considerable sum of extra money available. The consultation will be concerned with how that can best be done equitably and fairly and within the mechanics of the process. I would have thought that Bruce Crawford would want to welcome the considerable investment. I know that the Scottish National Party is unhappy because £24 million is a lot of money. However, we should not denigrate the sum.
How much individuals benefit will depend on their council tax band. People in band A other than in the north of Scotland currently pay less than £3.85 a week. Unless there is an increase that takes their payments above that amount, the scheme will not apply to them.
I am sorry to have to tell the member that this is new money and that it is not taken from elsewhere.
I have three questions. First, will the minister confirm whether he is making available £24 million a year or £24 million in total over three years?
It is £24 million over three years.
Secondly, can the minister assure me that businesses, which are currently paying very high water rates, will not be surcharged to fill the funding gap? Thirdly, in answer to Des McNulty's question a moment ago, the minister said that households would be £40 to £100 a week better off. Did he mean £40 to £100 a year better off?
Yes.
I am sure that the minister will want to clarify that.
I thank the member for correcting me. Now the nationalists cannot accuse me of lying and misleading the chamber. They did not notice my mistake, as they come to the chamber with set questions. Never mind.
John Scott asks a very good question about businesses. One of the options was for us to cross-subsidise and to find the extra money from non-domestic charges. That will not happen. As the member knows, the balance between domestic and non-domestic charges is a matter for the water industry commissioner. We do not have a part in deciding that. However, there is an important issue relating to non-domestic organisations that can source water from other areas and thereby reduce their demand. Whatever we decide, it is important that we keep those organisations within the public water system. In the west of Scotland, 40 per cent of all charges are non-domestic. If we were to lose that money, we would be in trouble. It must be protected and we have done everything possible to ensure that it is.
I welcome the minister's statement and the change in the Executive's policy. The former Minister for Finance, Mr McConnell, wrote to me on three occasions denying that we needed a water rebate scheme, and I am glad that the Executive has changed its opinion.
I seek an assurance from the minister that the consultation, if it is to be genuine, will allow the prospect of a change to the decision to exclude band A properties in the city of Glasgow. The average income of people in Glasgow is 21 per cent lower than the income of people in Scotland as a whole, but Glasgow's council tax is 25 per cent higher than the average for Scotland. Most of Glasgow's properties are in bands A and B. Although many people are in receipt of council tax benefit and do not pay council tax, they are struggling to pay their water bills. Can the minister assure me that the decision to exclude band A properties is not fixed?
It is a fixed decision because of the level at which we have set the cap. In the west of Scotland, people paying council tax in band A pay less than the amount at which water bills will be capped, so it is not necessary for them to be included in the scheme. Currently they pay £2.90, or £2.20 if they are single parents. Even with the increases, they will not come close to the cap, so there is no reason for them to be included.
Mr Sheridan says that people in Glasgow have a low average income. That will be reflected in their council tax band. As the member knows, people in higher bands pay significantly more in water charges than those in lower bands. In fact, people in lower bands pay a third of the amount that those in higher bands pay. That is how we will deal with Glasgow's problems—not just through the capping scheme.
As the minister has outlined, the increased charges have had a disproportionately harsh effect on North of Scotland Water Authority customers, particularly in my constituency, where many people live in band A and B properties. Will it be possible to put these arrangements in place for the next financial year? What plans are there for future years? Will money be available for capping water and sewerage charges for people on low incomes?
Yes. The north of Scotland has been especially badly hit because it has a low customer base of 600,000. The area is large and costly to deal with. That is why the scheme applies to band A households in the north of Scotland—they already pay about more than £3.85 a week, so further increases would be unacceptable. The scheme will be in place for the next financial year. A supplementary bill may be required a month or two in, but the full benefit will be available in the coming financial year and in the following two.
Given that the minister has accepted the need for such a scheme, why will it not be made retrospective for those who are suffering now? Can the minister confirm that the water authorities will be placed at the foot of the bonfire of quangos, which the First Minister assured us on Monday that he is about to light? Will the minister categorically deny rumours that are circulating that in internal documents the Labour-Liberal Executive is considering privatisation of the water authorities?
If it is not a soundbite, it is a scare story from the SNP.
We are introducing a significant contribution to the payment of water bills for the most vulnerable and all we get is carping, once again. The measure is not retrospective because it is for the next three years. It has taken time for us to introduce this to ensure that we get it right rather than get it quickly.
We have absolutely no plans to privatise water. Let me make that absolutely clear and let us not have any of those rubbish scare stories being paraded around the country. I am sorry for spoiling the SNP's party.
I welcome the minister's comments about, to use his words,
"vulnerable groups in the community."
He talked about the social inclusion agenda, which presumably means access to work. When will the minister address the job losses in the north-east fish processing industry, which are due to the high water and sewerage charges? Does the minister have plans to review the funding formula for the water authorities?
That partly relates to the question that Mr Scott asked about charges for non-domestic supply. It is for the water commissioner to get the balance right. We are keen to ensure that the balance is right, because of the importance to us of retaining the non-domestic sector. If we lose the non-domestic sector, the burden will fall on the domestic sector through increased charges. The commissioner is aware of that important matter. He is aware of our views and the views of others; he will take those into account.
I warmly welcome the minister's statement, which will help low-income households. Does the minister agree that the part played by councils—specifically Stirling Council—in pressing for action and in moving this important matter forward is to be commended?
I am always delighted to commend councils, wherever they are and whatever their political persuasion, but I am especially delighted to commend Stirling Council on what it has done. It has done well not only on this matter, but on a range of other issues in which I have been involved.
I thank the minister for his statement. Paragraph 2.1 of the consultation paper, "Affordability of Water and Sewerage Charges", states:
"Over 95% of all households are connected to the public water supply".
However, there is no reference to the 5 per cent that are not connected to the public water supply. The document also states that
"over 90% are connected to the public sewerage system."
Again, no reference is made to the other 10 per cent.
My questions are about the 5 per cent and the 10 per cent. The minister is no doubt aware that, in his constituency of Strathkelvin and Bearsden, a number of people access their water from private supply, have their own sewerage and make use of septic tanks. A number of them have complained about excessive charges and enormous increases in the charges for emptying septic tanks. Can the minister assure us that, in the further consultation—on which there appears to be little in this consultation paper—he will take into account the 5 per cent of people who do not have a connection to the public water supply and the 10 per cent who have their septic tanks emptied by the water authorities? Will he examine the punitive charges that are being levied, especially on our farmers—who are already in dire straits—for emptying septic tanks?
No, that will not be part of the consultation. If Lloyd Quinan wants to make representations to me, I would be only too pleased to hear from him.
I am delighted to hear the minister announce the action that he will take, which will have a positive impact on low-income households. It is sad but not surprising that the nationalists cannot bring themselves to welcome—
Order. There must be a question.
I will turn to my question, to afford others the chance to welcome the minister's statement and to comment on it.
The minister announced the consultation process. Can he say when that process is likely to finish and how it will be carried out, and will he ensure that the consultation is conducted in an inclusive way, along the lines of the consultation that was carried out for the equality strategy?
I would like to think that all our consultation exercises are inclusive. The document will be made available to all the interested parties, stakeholders and anyone else who wants to see it. It will also be published on the Executive website. The consultation process will end in January, after which we will make our final decisions when we know the various charges.
I, too, welcome some aspects of the minister's statement, but I have two questions. First, in view of the fact that a number of countries have a mandatory requirement for water meters to be installed in households, does the minister envisage that—in the next 10 years, for example—that will become a mandatory requirement from the Executive, whoever the Executive is at the time?
Secondly, although local authorities provide a breakdown of council tax and water rates at the beginning of the financial year, many people have asked whether it would be possible for the water rate to appear on the monthly bill that they pay. At the moment, they pay one lump sum and most people could not say how much their water rates are.
I am grateful to John Young for his support. I know that he has been a great defender of the public water supply and has opposed the Conservative party's plans to privatise the industry. I am sure that local authorities will hear what he says about including water rate figures in monthly bills; Executive officials will deal with that matter. He asked what will happen in 10 years' time, whoever the Executive is. It will most certainly still be a Labour and Liberal Democrat coalition—people can have their dreams, but we live in a world of reality. We have no plans for making water meters mandatory. That tends to happen in places where there is a shortage of water, which is not our problem up here.
I welcome the minister's statement. Can he nail the myth that this is, in some way, an adopted policy of another party? Can he confirm that, in her previous statements to the Parliament, Sarah Boyack said that she was carrying out a review to establish what could be done to protect vulnerable groups in society?
I have been in politics for a long time and know that the Opposition adopts a number of poses—some of which I adopted myself, which is how I know about them. One is to say, "It's not enough—gie's mair." Another is to use the word "retrospective", which we heard earlier. Yet another is to say, "It's my policy that you've adopted."
On that note, we conclude the statement and questions.