Water Resources (Scotland) Bill
The next item of business is a debate on motion S4M-05711, in the name of Nicola Sturgeon, on the Water Resources (Scotland) Bill.
15:42
First, for the purposes of rule 9.11 of standing orders, I wish to advise the Parliament that Her Majesty, having been informed of the purport of the Water Resources (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.
I am pleased to open this stage 3 debate on the Water Resources (Scotland) Bill. At the outset, my thanks go to the Infrastructure and Capital Investment Committee for its thorough consideration of the bill. I thank all those who provided written and oral evidence to the committee as well as those who responded to the Government consultations and everyone who has worked with us throughout the legislative process. My thanks are also due to the Subordinate Legislation Committee for its scrutiny and its reports on the bill. I also place on record my thanks to Scottish Government officials—in particular, those in the bill team—who have worked extremely hard to bring the bill to this point today.
I am sure that every member in the chamber will agree that we in Scotland are extremely fortunate in having a beautiful environment. We perhaps do not always think of our water environment in that way—as we struggle through the rain—but we are extremely lucky to have it. We are also very fortunate in having, in Scottish Water, a very high-performing public corporation. The Government intends that Scottish Water will remain a high-performing public corporation, which I know will not please those Conservative members who are in the chamber this afternoon.
The bill recognises the critical importance of our water resources and it rightly tasks ministers with leading a collective effort to make the most of this natural asset. As members are aware, the bill is just one part of an ambitious and evolving programme of action that intends to develop Scotland into a hydro nation. That transformation into a hydro nation will be achieved over the years ahead through collaboration and partnership. We will of course report to Parliament on progress, and I hope that everyone will feel able to play a positive role in what is a vital agenda.
We also have a responsibility to demonstrate good stewardship of our water resources, not only for the benefit of people here in Scotland but to show that good stewardship to the rest of the world. Many other countries around the globe would wish to have the abundance of water that we enjoy, because many of them face increasing water scarcity. We have knowledge to share with them. No doubt we have some lessons to learn from some of them, too, but we need to play our part in the global effort to better manage the world’s water and support international co-operation and learning on water issues.
One good example of how we are doing that is the work that Scottish Water, the Scottish Environment Protection Agency and the James Hutton Institute are doing with the Government of Malawi. Those water experts will be discussing the management and governance of water and waste water and have the Scottish Government’s full support in that endeavour.
I sincerely hope that, when Scottish Water works abroad, it does not engage with commercial opportunities to try to privatise the development of services in some countries. There is a move for that. Throughout the world, some big commercial opportunities are looking to exploit poor countries’ water provision.
Neil Findlay raised that point at stage 1 of the bill. I fully recognise the point that he makes; it is a serious one. I simply say, as I did at stage 1, that Scottish Water is in a great position to lead by example not only as a high-performing public water authority but as one that has built up, and will continue to build up, extensive expertise that should be shared around the world for the benefit of those in other countries who do not have the water abundance and water expertise that we do. Scotland should be proud of Scottish Water, not only for what it does at home but for the international example that it can set as a high-performing public body.
As everybody appreciates, not only do we have expertise in water governance, we have academics with specialist knowledge of global water issues and management, as well as a track record of developing new and innovative technologies in the sector. Scottish Water is also providing technical advice to the water industry in Qatar, for example.
We have a number of enterprises that provide water services. Biomatrix Water is based in Moray but delivers ecological engineering services internationally.
Those are all good examples of how we are able to share with other parts of the world something that we have built up in Scotland as a result of the particular circumstances that we have here. The bill helps us to do that. It strengthens the focus on what we are trying to do.
Part 1 of the bill gives ministers a duty to take steps to develop the value of our water resources.
During the passage of the bill, I listened to, and came to agree with, the considerable weight of opinion that the value of our water resources should be expressed in terms of not just economic but social and environmental benefit. Our intention was never to drive economic benefit to the detriment of social and environmental factors, because we need to develop all aspects of value. Therefore, I am pleased to have amended the bill to make that absolutely clear. We thank all those who made that point at previous stages of the bill.
We will deliver against the duty to develop the value of our water resources, and the bill adds momentum to a wide-ranging programme of work that is already being energetically pursued.
We have completed a feasibility study on delivering a water innovation park, for example, which has concluded that we should progress with that proposal. Scotland’s centre of expertise for waters—CREW—led by the James Hutton Institute, is busy producing research that will support the hydro nation agenda, including a recently published report on the latest evidence and thinking about developing the value of water resources.
The climate justice fund has also recently awarded its first grants. Work has started on water-related action in sub-Saharan Africa. That demonstrates that we are serious about sharing skills and knowledge and being a global force for progress in the vital area of water stewardship.
A cohort of hydro nation PhD scholars has been recruited to deliver new primary research in water-related topics, and we are also very pleased to support the United Nations international year of water co-operation.
Co-operation is vital not only if we are to better manage water resources domestically—it is important for us domestically notwithstanding the relative abundance of our water—but if we are to contribute to the better management of resources around the globe.
The hydro nation agenda and the bill in particular speak of our determination to develop all aspects of water value, from the environmental improvements that are crucial to maintaining and improving our landscape and habitats, to innovations in water management and water efficiency to keep water bills low for households and businesses alike. Again, that is a very important objective. I take the opportunity to remind members that we have domestic water bills for 2013-14 that are on average £54 lower than bills in England and Wales. That is another testament to the success of our public corporation, Scottish Water.
The bill further supports Scottish Water in its objectives. For example, late on in the amendment stage we debated how we can support Scottish Water in being able to maintain its assets better through new controls on fats, oils and greases and allow it to take proactive action with new water-sampling powers. The bill modernises the procedures to be followed when there are water shortages and puts further emphasis on the delivery of even greater returns from Scottish Water’s estate and infrastructure, most importantly by generating more renewable energy, which is another important objective in this country .
Understandably, I have talked a lot today about Scottish Water, and no doubt other speakers in the debate will do that too. However, it is important to reflect that more players are involved in the agenda than just Scottish Water; organisations such as Scottish Enterprise, Highlands and Islands Enterprise, Scottish Natural Heritage and SEPA have key roles to play, and we must always be mindful of that. Those organisations are important to the development of the value of our water resources. For that reason, the bill enables ministers to direct them as well as Scottish Water in relation to this agenda.
More broadly, our academics and engineers from the wider water industry, and individual land managers and farmers all have diverse roles to play in the different types of partnerships. Individuals can also play their part by respecting water as a resource that should be used carefully and responsibly. In that regard, the bill supports communities that share septic tanks; it supports communities to maintain them more effectively as one part of a broader work plan to improve our management of such tanks.
As I said at the amendment stage and as was commented on at stage 1 and regularly throughout the bill’s passage, the bill’s abstraction provisions are the most controversial provisions, so it is probably appropriate that I take a moment to comment on abstraction. As members will be aware, abstraction is the process by which water is taken from a river or other water body for a specific purpose. That is currently regulated by SEPA, using the controlled activities regulations. When an application for abstraction is made, SEPA considers the request and the impact of the abstraction on the water body from an environmental perspective and then decides whether to grant a licence. I am pleased that the bill contains new powers for ministers to consider applications for the largest abstractions from the water environment. That will not alter SEPA’s role as the environmental regulator, because the controlled activities licence will have to be sought in the usual manner. However, it is about ministers deliberately taking a broader view and looking to the future and not just taking the important but rather narrower view of environmental aspects. We need to take that broader view because we are looking at a future where our water assets will be increasingly valuable in a world of growing water scarcity.
I think that we all want Scotland to be a great place in which to do business and we all want new enterprises to be attracted to Scotland. As a relatively water-rich country, we may increasingly see businesses that are heavy users of water wanting to move into Scotland. We should not necessarily discourage that, but the new abstraction procedure will enable us to ensure that the best use is made of our water resources and that we support the needs of large water abstracters.
As we move towards the end of the bill’s legislative passage, we are looking towards the bill’s implementation and drawing up the regulations and guidance that will be necessary to support that important process. Throughout the passage of the bill, we have taken an open and collaborative approach to consulting with stakeholders. As I have said, one of today’s amendments came out of a particular approach by a stakeholder. I want to be clear to members that, as we move into the phase of regulations and implementation and guidance, we will work with stakeholders to ensure that the regulations and guidance are developed collaboratively and take account of any concerns raised.
We should never lose sight of the fact that we are incredibly fortunate to have great water resources in Scotland. We must charge ourselves with a duty to make the most of what is a wonderful natural advantage. Water is part of the very spirit of Scotland, and we should be mindful not only of how lucky we are but of its lack of availability elsewhere in the world. We must understand and discharge our duty to conserve and protect the resource that we have. We must also be creative and innovative in developing the full potential of what is our most fundamental and precious resource. The bill sets us on that journey. I ask—and I hope—that members will support the Water Resources (Scotland) Bill at decision time.
I move,
That the Parliament agrees that the Water Resources (Scotland) Bill be passed.
15:56
The bill has not changed a great deal since the stage 1 debate at the end of the December, which makes it a bit difficult to think of anything terribly new to say about it. I did my best to protract the amendment stage—obviously without a great deal of success.
The bill is not particularly radical—it is less radical than we had expected after the hype that had preceded its introduction. The provisions are reasonable in relation to the bill’s aspirations to promote the economic, environmental and social benefits of a natural resource that Scotland possesses in so much abundance; they are also sensible and something on which we can all agree.
Stewart Stevenson is not in the chamber—we will all, I think, be thankful that presumably we will be spared his analysis of the composition of his body that he gave us at stage 1.
I am pleased that progress has been made on issues that were raised at stage 1. The most important example is that of the changes that have been made to ensure that the value of Scotland’s water resource specifically includes not only economic benefits, but social and environmental benefits. That issue was addressed initially in an amendment that the cabinet secretary lodged at stage 2, but it has been reinforced further by Jim Eadie’s amendment 25.
Of course, I was disappointed—but perhaps not surprised—that my amendment on the specific inclusion of peatlands has been unsuccessful. We often talk in the chamber about the enormous contribution that Scotland’s huge natural peat bogs and other peatlands resource make to our environment. Indeed, peatlands—like our water resource—are a resource that Scotland possesses in abundance. Although stage 3 offered an opportunity to address the situation, there seems to be a reluctance to follow up the rhetoric with legislative action.
The information that was given at stage 2 on how the Government is supporting the restoration, protection and maintenance of peat bogs and peatlands is, of course, welcome. However, the bill presented an opportunity to progress the sustainable management of peatlands specifically as part of the development of Scotland’s water resource. I am disappointed that neither the Government nor, indeed, other members agreed.
I am disappointed about my trade effluence amendment, too. I hope that no incident occurs, but if any public sector body causes problems and there is an incident, I will be the first to run up and say, “I told you that we could have solved these problems in the bill”.
At stage 1, concerns were raised about part 2, which is on water abstraction, with many witnesses questioning the necessity of that part of the bill, which was added fairly late on in the process. At stage 2, Alex Johnstone, supported by the RSPB, the Association of Salmon Fishery Boards and other stakeholders, unsuccessfully attempted to have the provisions on abstraction removed.
I understand that regulations will be introduced on the information that will accompany an application. I presume that those will come before the Infrastructure and Capital Investment Committee for examination. The issue of the non-consumptive nature of water abstraction for the whisky industry was raised at stage 1, and I will be interested to learn whether that issue will be addressed through the regulations.
During stage 1, some concerns were raised about the adequacy of the reporting provisions in the bill and about the wider hydro nation project. Indeed, the committee agreed that it wished to scrutinise the bill, if enacted, annually during the first reporting period. That, too, has been addressed by an amendment that has been agreed to, and I am sure that the committee will be pleased to take on that responsibility.
At stage 2, I suggested that the bill should make specific reference to the registration, care and maintenance of septic tanks and the need for SEPA to educate the public about and raise awareness of the legal obligations on septic tank owners. From time to time, those of us who represent rural areas are approached by constituents with issues that have arisen as a result of how private septic tanks are—or are not—maintained. Alex Johnstone expressed support for an amendment on the matter that I lodged at stage 2. I did not move the amendment, because the cabinet secretary told us that SEPA, Scottish Water and Scottish Government officials had agreed to a work plan to address issues such as increasing the registration of septic tanks, sharing data on locations and generally raising public awareness of owners’ responsibilities to maintain and empty their tanks.
The Infrastructure and Capital Investment Committee has been offered briefings from Scottish Water and SEPA about progress with that work, and I hope that there will be time to include the issue in our work programme. Members such as me who represent rural areas, where there are many private septic tanks, can help to promote such work in our constituencies and can assist with the raising of public awareness. I am looking forward to learning more about the work plan, and I hope to be able to play a part in publicising progress with it in my constituency and in ensuring that my constituents are made more aware of their responsibilities.
Reference has been made to the desire of some members to privatise Scottish Water. I was a member of Strathclyde Regional Council when it held a referendum on whether the then Conservative United Kingdom Government’s plans to privatise water services should be followed. I think that about 90 per cent of people rejected those privatisation plans.
My memory of that is that it was tied in with the reorganisation of local government. The Conservative Government at the time was looking at police forces, education authorities and so on. My understanding is that there were six options, of which privatisation was one. It was not the only option.
I thank Mary Scanlon for that intervention. The referendum that was held by Strathclyde Regional Council was fairly clear. It asked the people of Strathclyde whether they wanted their water services to be privatised. At the time, Strathclyde Regional Council had responsibility for the water supply in Strathclyde. The privatisation of water services was comprehensively rejected by the people of a region that comprised almost half the population of Scotland, and I do not think that the position in Scotland will have changed greatly since then.
Scottish Water is a success story. It is more efficient and cheaper than many of its private sector comparators south of the border. Of course we all receive complaints from constituents from time to time. Those complaints often have substance and we follow them up, but I have always found Scottish Water to be efficient and prompt in responding to any issues that I raise with it.
A few weeks ago, I and the convener and deputy convener of the Infrastructure and Capital Investment Committee attended a David Hume Institute seminar, at which we were advised that Scottish Water is the only public utility in the UK that has achieved the gold standard in procurement. I had not known that. We should be proud of such achievements. We should not go down the line of, “Public sector bad; private sector good.” There are times when we should celebrate the fact that the public sector is doing better than the private sector. It can do better than the private sector and, with the right powers and the right direction, it will.
In one of my amendments, I made reference to the subsidiaries of Scottish Water, which include Scottish Water Horizons, Scottish Water Business Stream—I do not know about other members’ experience of that body, but I find it remarkably diligent in pursuing payment of bills that have only just been dispatched—and Scottish Water International, which was formed at the beginning of last year and which is already using Scottish Water’s expertise to the benefit of a number of other countries. I recognise the concern that Neil Findlay expressed at stage 1 and earlier today. We would not want such work to be engaged in at the expense of people who live in poorer countries, and we certainly would not want Scottish Water, as a public company, to participate in the privatisation of water resources in other countries. However, it can bring a lot of expertise and experience.
Scottish Water proves that the public sector can deliver excellence and it would be a great mistake to sell it off for the sake of a one-off injection of finance. In fact, that money might not necessarily help the financial situation in Scotland; the UK Treasury might also lay claim to it.
The public sector is often depicted as bloated and inefficient but that is not true of this public company. As I have said, Scottish Water is a testament to the public sector’s ability to deliver excellence and the additional responsibilities conferred by the bill will enable it to develop our water resource further—
It is not all to do with the public sector; many Scottish Water infrastructure projects are carried out through a very good and successful partnership with the private sector. Indeed, one such organisation, Morrison Construction, works very well and to very high standards in that partnership.
I certainly agree with the member. As she will know, we have been in favour of partnerships between the public and private sectors. Others in the chamber might in the past have expressed their dislike of public-private partnerships but even the Scottish Futures Trust is taking forward models based on them.
That work is very much to be welcomed, and I think that the public sector can play a strong role in it. I do not want a successful public sector company such as Scottish Water to be sold off to the private sector.
The bill will enable Scottish Water to develop our water resource further, which I believe will deliver multiple economic, environmental and social benefits to Scotland.
I call Alex Johnstone, who may have a generous five minutes.
16:06
First of all, I congratulate Elaine Murray on taking so much time. When one is given enough time to speak, one relaxes and finds an awful lot more to say. That has certainly been my experience.
In supporting the bill at stage 3, I want to clarify one or two misunderstandings about my personal position and the position of the Conservative Party on the water industry. We will all remember that, back in the days before Scottish Water was created, the Scottish water industry—or, I should say, its constituent parts—was a bit of a basket case. The various parts of the industry were underinvested in, poorly resourced and, in some cases, not managed as well as they might otherwise have been. The creation of Scottish Water was therefore something of an inevitability. It was necessary for things to be gathered up, put in one place and pointed in the right direction.
Since the Scottish water industry became Scottish Water, things have come on in leaps and bounds. I will not criticise Scottish Water’s performance, which I believe to be extraordinary. Everyone concerned, from the management right down to those in the field and the contractors that work with the organisation, deserves to be praised for what they have achieved. They have made the Scottish water industry something that we can all be proud of. Now that Scottish Water has been in place for 10 years and more, I believe that this legislation is necessary to ensure that the industry can change, develop and progress.
Although I think it essential to express my support for the industry, I believe that certain alternative structures could, if allowed, encourage it to develop more effectively. The word “privatisation” has been used in the debate—indeed, it is often used by those on the Labour benches and the Government’s back benches—but it does not actually describe what the Conservative Party has been proposing for the past five or six years. If members recall, we proposed the mutualisation of the industry. We believed that it could be freed from the dead hand of state control and become the property of its customers rather than the taxpayer.
I believe that in his objection to one of my amendments the member said that he regretted that the bill did not enable Scottish Water to become “a private company”.
There is a wonderful debate to be had—indeed, we had it in the chamber some years ago—about whether a mutual or co-operative model is a private sector or a public sector model. We were keen to emphasise that we wanted the industry to be owned by its customers rather than by the Government.
With that little bit of fine tuning, I will progress to talk about one or two other key things that the bill brings to our attention.
As it is, Scottish Water has an amazing level of expertise, skill and talent. Much of the bill is about setting Scottish Water free from the dead hand of state control. In that respect, it does many of the things that Conservative members would wish to do, but it chooses a different model to achieve those objectives. Part 3 will have that specific effect as it will let Scottish Water do valuable things and work in partnerships that will allow it to progress the industry in Scotland. The minister claimed that water bills in Scotland are £54 lower than those south of the border, of course, but the Government consistently fails to take into account the billions of pounds of taxpayers’ money that have been invested. Unless we recover that money some day, that figure is an inaccurate representation.
In looking through the other parts of the bill, it is fascinating to see that a whole part of it—part 7—is devoted to the issue of water shortages. I come from a community that has been washed away on more than one occasion in the past two or three months, and I would love to experience a water shortage. I look forward to doing so in future. When the regulations are eventually implemented and ministers have to make pronouncements on water shortages, I will be out there with my deck chair enjoying the change in the weather that we will experience.
Part 4 has a key part to play in respect of raw water quality. I value the opportunity that it gives the industry to work hand in hand with other organisations and individuals to ensure that raw water is of the highest quality in Scotland.
Elaine Murray has already touched on part 6. In my postbag, the issues of private sewage works and septic tanks in particular are of a surprisingly high level of significance, and I value the opportunity to look at them afresh—perhaps that is the wrong word to use in relation to sewage. I hope that I will be able to give appropriate advice in a number of current cases and take forward the issue of septic tanks in a constructive, engaged and co-operative manner, because quite often that experience is not reflected when those issues are being dealt with.
Part 2 relates to water abstraction, in which I developed a peculiar interest during stage 1. My concern was that the issue had been added to the bill late and without adequate consultation, and that there was little or no explanation about why a number of provisions, although they were not wrong, had been included. That is why I lodged a series of amendments at stage 2 that would have removed part 2 completely. Unfortunately, those amendments were not supported, and I thought that I would not waste our time today by lodging them all again. However, I take the opportunity to express my concern again and, later in the debate, Mary Scanlon will go into some detail about our concerns around part 2 and abstraction interests.
Had I been in a position to influence what is in the bill, I would have done things differently, but much of what is contained in it is worthy of support. With that one regret, I take my final opportunity to express my support for the bill at stage 3.
We now move to the open debate. We have some time in hand. Gordon MacDonald has a generous four minutes.
16:14
Water is one of Scotland’s primary assets and the Water Resources (Scotland) Bill creates a framework that will allow the development of Scotland’s water as an economic resource; at the same time, the bill safeguards the fulfilment of Scottish Water’s core functions.
Scotland has an abundance of water with almost 2 per cent of the land surface covered by freshwater lochs and rivers. Scotland has approximately 70 per cent by area and 90 per cent by volume of all the UK’s inland surface water. We therefore have a duty to use that resource wisely and to maximise its potential.
The Infrastructure and Capital Investment Committee’s stage 1 report highlighted the level of support for the Water Resources (Scotland) Bill from a range of organisations, including the centre for water law, the Institution of Civil Engineers Scotland, the UK Environmental Law Association and SEPA. In the stage 1 debate, I commented briefly on the £44 million that Scottish Water will invest to meet its new obligations. The return, in relation to potential savings and meeting our climate change targets, will be substantial.
Part 3 will place a new duty on Scottish Water to promote the use of its assets for the generation of renewable energy. That could take the form of putting water turbines into high-pressure water pipes, converting reservoirs into hydro dams, or placing wind turbines on some of the 70,000 acres of land that it owns, all of which would help us to meet our climate change targets.
In October 2011, members of the committee toured the new water treatment works at Glencorse, outside Edinburgh. That new facility incorporated a hydro turbine that meets more than 60 per cent of the site’s energy needs. Scottish Water estimates that it could boost its hydro power capacity through the development of hydro turbines to deliver an additional 25,000MWh per year from existing assets by 2015. That highlights the potential energy savings that could be made by retrofitting turbines in other waterworks throughout the country.
However, it is not just about making savings for Scottish Water. Scotland has a wealth of experience in hydro power stations dating back to 1927, and has one of the largest hydroelectric pump storage schemes at Cruachan dam. The existing 145 hydro power stations contribute approximately 12 per cent of Scotland’s electricity generation, and initial studies by Black and Veatch on behalf of Scottish Water have identified 30 sites with the potential for cost-effective hydro power generation. Again, such developments will help us to achieve our 2020 renewables targets.
In allowing Scottish Water to develop non-core activities, we must protect the 2.4 million households and 152,000 businesses that it supplies with 1.3 billion litres of water and sewerage services every day. The bill achieves that by inserting new section 50A into the Water Industry (Scotland) Act 2002, which places a duty on Scottish Water to
“take reasonable steps to develop the value of its assets and expertise”
only in so far as it
“is not inconsistent with the economic, efficient and effective exercise of its core functions”
which are to provide water and sewerage services in Scotland.
Scottish Water has delivered one of the UK’s largest investment programmes for the lowest bills. It delivered £491 million of investment in 2011-12, which is 20 per cent higher than its delivery plan target. In the past 10 years, a total of £5.5 billion has been invested across Scotland.
Scottish Water, one of the few remaining publicly-owned water companies in the UK, recently announced that the average household bill for water and sewerage for in 2013-14 will be £334, compared with the average bill south of the border of £388. That is an 11 per cent saving for the average household in Scotland. In comparison, the average charge back in 2002-03 was £30 higher than in England and Wales.
Scottish Water has delivered higher-than-planned investment in its core activities, with average annual bills equating to less than £1 per day for all water and waste services—or the cost of a single 500ml bottle of water.
I am sure that people throughout Scotland see the benefits of Scottish Water being a publicly-owned company.
As climate change leads to even more wet weather, there will be a requirement to build bigger sewers to help to deal with the increased rainfall. Residents in Kingsknowe in my constituency, who have suffered regular flooding since 1999, will be pleased to know that Scottish Water plans to replace the main sewer in the next financial year. I hope that even more efficient use of Scottish Water assets will mean that people throughout Scotland see further benefits from having a locally-owned and locally-controlled water company.
16:20
I was pleased to be on the Infrastructure and Capital Investment Committee during stage 1, but I departed to pastures new in the Finance Committee before stage 2. I found this bill to be one of the most difficult ones that I have had to grasp—indeed, an image of trying to grasp water in my hand occurred to me several times when I was considering it. I have no doubt that that was due to deficiencies in my understanding.
I have come to appreciate the bill a little more over time. Part of the problem is that, although the bill is modest and worthy, it does not live up to the expectations and rhetoric around the hydro nation that we heard before it was introduced. Having said that, I think that the bill is worth while and that the parliamentary process has been good. I was not present at stage 2, but I read the Official Report of proceedings and it is fair to say that the cabinet secretary listened and responded to many—although not all—of the concerns that had been expressed about the bill.
Across the Parliament there is wide acceptance that water is more than a prized natural resource and is an essential that we cannot do without. Key industries, from agriculture and food and drink to manufacturing and energy, depend on Scotland’s natural water resources and have an interest in ensuring their sound management.
Water is held particularly dear by people in Scotland, and Scottish Water’s status as a public company is highly valued, as members said. That goes back to the key privatisation debates that Elaine Murray and I remember so well—privatisation was an early issue that I was concerned with in the Westminster Parliament. The debates showed the strength of the people of Scotland’s feelings on the matter, and the Scottish Government was right to decide that there should be no change to the status of Scottish Water. A consequence of the current status, as the cabinet secretary reminded us, is that water bills in Scotland are significantly lower than water bills in England.
The bill sits with the hydro nation agenda, which is all about realising the value of Scotland’s water for the benefit of the Scottish economy as a whole, as well as Scottish industry. However, we must be clear that the value of Scotland’s water cannot be measured simply in pounds and pence. Water is a valuable resource in the widest possible sense, so I am pleased that at stage 2 the Scottish Government agreed to the amendment that widened the concept of the value of Scotland’s water resources. It is about realising not just economic benefit but environmental and social benefits and it is right that that is explicit in the bill. There must be an all-Scotland response to our economic difficulties, but the development of our economic potential has to be consistent with important principles of sustainability, especially where Scotland’s water is concerned.
I welcome today’s further developments in that regard. Jim Eadie talked about the need to attend to all three pillars of sustainability and his amendment 25 strengthened those pillars, as did the cabinet secretary’s amendment on the monetary and non-monetary value of Scottish Water.
I welcome the duties on the Scottish ministers in part 1. I perhaps did not appreciate the issue at the beginning of the process. It is important that things that ministers could choose to do will now be requirements. I am pleased about that. However, as I said earlier, I still think that there is a bit of a contradiction between the duties of the Scottish ministers and the rather narrower duties of Scottish Water.
I suppose that I should apologise to the cabinet secretary for asking her to explain her explanation—no doubt there was another failure of understanding on my part—but I was expressing concern that external stakeholders raised, and in relation to today’s amendment to section 22, I am concerned that Scottish Water may interpret its duties in a rather narrower sense as a result of the insertion of the word “commercial” before “value” in new section 50A(1) of the Water Industry (Scotland) Act 2002. It is important that Scottish Water meets its wider duties relating to the environment—meeting water framework directive obligations, minimising carbon emissions and so on.
As the cabinet secretary indicated, co-operation is vital for Scottish Water. I would have liked that to have been stated in the bill in relation to all its statutory duties. Working in partnership with other bodies will be crucial for Scottish Water in achieving its objectives. The same applies to the whole issue of scrutiny. I am pleased that Jim Eadie’s amendment 26 on scrutiny was agreed to but, again, there must be scrutiny of all Scottish Water’s statutory duties.
I think that we are getting a little bit of extra time, so I will briefly—
You do not have to be that brief, Mr Chisholm.
I have not commented on two of Elaine Murray’s amendments, so perhaps it is in order to express some disappointment that her amendment 2, asking for ministerial duties to apply to Scottish Water Business Stream and Scottish Water Horizons, was not accepted. It seems that Scottish Water describes those bodies as stand-alone businesses. It concerns me that Scottish Water will not view it as part of its duty to issue directions, and it would have been better if Scottish ministers were able to issue directions to those two companies, too.
Like other members, I am puzzled about the provisions for fats, oils and greases not being changed with reference to schools and certain other public bodies. The reason seems to be to do with the possibility of financial burdens being imposed on the public purse. If there is time, perhaps the cabinet secretary could explain in her summing up what those burdens under the Sewerage (Scotland) Act 1968 are—those seem to be the main reason why she did not accept Elaine Murray’s amendment 5.
I was also disappointed that the cabinet secretary did not accept Elaine Murray’s amendment 1 on peatlands, which are a vital part of Scotland’s water resource. Peatland restoration can improve raw water quality, as well as having other economic and environmental benefits.
Having expressed some disappointment regarding those various amendments, I welcome the fact that the cabinet secretary has accepted other amendments, both today and at stage 2, and the fact that we now have a better bill than we had at the start of the process.
I call Maureen Watt. You have a very generous amount of time, Ms Watt.
16:27
Thank you, Presiding Officer. I am not sure how much of it I will take, but here goes.
It is with a little tinge of sadness for me that we are drawing to the close of consideration by the Infrastructure and Capital Investment Committee and the Parliament of the Water Resources (Scotland) Bill. I admit that I found the whole process fascinating. If I were leaving university today, I would consider the water industries in Scotland as offering very exciting career opportunities.
I add my thanks to all those who have been involved in the passage of the bill, including the committee clerks, the bill team and the stakeholders who helped us in our deliberations. Early on, the committee visited Scottish Water’s sampling offices at the Heriot-Watt science park, where we learned a great deal about Scottish Water’s activities. The water supply and waste water sub-sector in Scotland is estimated to have a market value of £709 million and to employ around 6,000 people. I am referring not to Scottish Water itself, but to the more than 300 companies in the sector in Scotland.
Scottish Water’s record since its formation has been impressive. Since 2002, Scottish Water has stripped out 40 per cent of its costs, and it now provides water to Scottish customers at a lower cost than any of the private companies in the rest of the UK. Drinking water quality is at its highest level, leakage has been reduced by 70 million litres per day, and it has recorded the highest-ever customer satisfaction level. Even this week, Scottish Water announced that it is to invest around £250 million in improving water projects in the Clyde area.
To me and to SNP colleagues, it is inconceivable that the Tories and their Lib Dem colleagues can still be hell bent on privatising this valuable Scottish resource. Let us face it: mutualisation is the first step on that road. When I challenged Alex Johnstone on that on the way back from Heriot-Watt, he admitted—as he did today—that indeed Scottish Water was impressive, but he trotted out the old broken record of the Tories: public bad, private good.
There we have it: dogma rules okay. Private fat cats, not the whole Scottish population, should benefit. We saw Thatcher sell off Scotland’s oil resources in the 70s, and given half the chance, the Tories would sell off—
Will the member give way?
Yes.
When I challenged—oh, I have not put my card in.
It is okay, we have plenty of time. We can wait for you.
I do not want to waste your time.
I am sure that Maureen Watt will agree that a reason for people such as the Tories to be circling with their fangs dripping with blood is that they see Scottish Water as a potential cash cow, because it is so successful.
If Mr Findlay had let me finish, I would have said that frankly, and fortunately, there is not even half a chance—not even one iota of a chance—that the Tories in Scotland will see water privatised, certainly not in the near future.
Scottish Water and any of the other 300 companies in the sector can now also compete for global water supply and waste water treatment works, which amount to around £8 billion in the UK and £242 billion worldwide.
Water scarcity and access to clean water and sanitation are global concerns, and Scotland, as a known hydro nation, can play an international role on them. The Government has commissioned a virtual centre of expertise on water, which can pull together advice and information on water management. As the cabinet secretary mentioned, the James Hutton Institute, which is based in my constituency, is leading on that, as is the University of Dundee’s United Nations Educational, Scientific and Cultural Organization centre for water law, policy and science, and Scottish Water itself. All those organisations provide a strong basis for Scotland to be known as a hydro nation.
The Government wants Scotland to be
“the helpdesk to the world on water governance”
and those three institutions also provide a strong basis for that. The fact that Scottish Water already works in countries such as Qatar, India and Canada demonstrates the potential to meet that aim. Scottish Water International works with Governments at national and state level on methods of governance, openness, transparency and accountability and we have already seen the benefit of that, when John Swinney was able to find £50 million to use elsewhere in the Scottish budget rather than on Scottish Water. WaterAid is supported financially and with expertise by many who work in the industry and it is a good example of how Scotland works worldwide.
Although Scottish Water is a high-performing public company, it is not resting on its laurels. I was interested to hear from Peter Peacock, and the body he now chairs, Customer Forum, on how willing Scottish Water is to engage with it and others to have other perspectives on the industry. Scottish Water would tend to admit that it comes to the area from a rather geeky engineering background, so it is interesting to hear from customers and others on how the industry is perceived.
Business Stream still has a lot to do to assure business customers that it deserves their business, as competitors from other parts of the UK enter the market. I wish Scottish Water’s new chief executive, Douglas Millican, all the best in his new role and I hope that the message of the passing of the bill is that Scotland appreciates this fantastic resource and is about how we manage it and use our experience to help other countries benefit from Scottish expertise.
Part of my constituency is rural—as is part of Elaine Murray’s—and I recognise totally the importance of septic tanks to a lot of our constituents. I sincerely hope that the parts of the bill to improve maintenance where previously there may have been problems will be beneficial.
I am mindful of the costs of water purification. I hope that, through partnership with landowners and farmers, we will be able to drive down those costs, by ensuring that the water that comes off our hills needs less treatment before it reaches customers.
I say to the cabinet secretary that I hope that an information campaign will be run in several languages on the disposal of fats and oils before there are any charges or convictions. Some business premises are perhaps still not aware of their duties and responsibilities on such disposal.
The bill offers huge opportunities for all who are involved in the water sector in Scotland. I support the bill.
Thank you very much, Ms Watt. I appreciated your speech.
16:35
I thank the Infrastructure and Capital Investment Committee for its work on scrutinising and amending the bill. It was nice to hear the committee convener say that she had enjoyed the process so much that she was quite sad that it was over. I thank Maureen Watt for that.
I realise that not everyone who is in the chamber was politically active 20 years ago but, when Elaine Murray spoke, I remembered the options for moving responsibility for water following the replacement of the regional and district councils. One option was to use the same arrangement as that for the police and to have eight water authorities. I clearly remember the six options, but Strathclyde Regional Council did not choose to put those options to voters.
That has jogged my memory on the fact that, after local government reorganisation, three water authorities were established—North of Scotland Water Authority, East of Scotland Water Authority and West of Scotland Water Authority—which became Scottish Water. I am not a member of the Infrastructure and Capital Investment Committee, but I think from what I have heard today that we could learn quite a bit from that merger, particularly as we look ahead to the merger of our police boards.
As Maureen Watt and others have said, there is no doubt that we have a modern water industry that is fit for purpose. Maureen Watt made the point that, since 2002, Scottish Water has stripped out 40 per cent of the costs. In 2002, it was one of the highest-cost water producers in the United Kingdom, so stripping out costs was essential in order to move forward.
When I spoke in the stage 1 debate, I raised the issue of water abstraction. It is worth putting it on the record again that the absence of any consultation on part 2 of the bill, which is on abstraction, in the two public consultation exercises is unacceptable in creating good legislation. I hope that that does not become an acceptable precedent for future legislation.
The Government’s response to the committee said:
“my officials have been and continue to be in dialogue with a number of organisations ... to explain the policy intention and”
give
“reassurance that their views will be taken into account.”
That dialogue is welcome, but it can never be a substitute for thorough consultation.
On seeking reassurances, I will ask about the concerns that the Scotch Whisky Association raised at stage 1 about the 10-megalitre limit on abstraction and about the significant difference between the amount of water that is abstracted and the amount that is consumed in the whisky distilling process. No distillery in Scotland currently uses 10 megalitres of water a day but, given the increasing demand for whisky—which, by law, can be produced only in Scotland—the day might come when that limit needs to be exceeded.
A significant point is that two thirds of the water that is abstracted for whisky distilling is returned to the source in a timeframe of between two and 12 hours. Surely it would be more sensible in this case to measure the water that is consumed rather than measure the water that is abstracted without taking into account the two thirds that is returned to source. I seek an assurance from the cabinet secretary that she will address those concerns and consult the industry when the regulations are drafted. I appreciate that she alluded to that earlier.
At stage 1, the committee questioned whether there was a need for a new abstractions regime given that the existing controlled activities regulations system was considered to be working well. Several witnesses found it difficult to see the benefit of an additional layer of regulation, and the committee’s report stated that Energy UK considered that part 2 of the bill was not in keeping with the better regulation agenda.
My final point is about the leakage rate. When I mentioned it to my colleague Alex Johnstone, he said, “Dinnae mention that. It’s a lot better than it was.” I appreciate that it is a lot better, and we should all welcome that, but 700 million litres of leakage every day is a significant amount and, I would think, an unacceptable level. I hope that the leakage rate will continue to fall because, despite our high volumes of rainfall, water remains a scarce resource.
16:41
As Elaine Murray said in her speech at the beginning of the debate, the Water Resources (Scotland) Bill does not rank among the most significant or contentious legislation that we have debated. Malcolm Chisholm was right to describe it as not having lived up to the hype that existed before it was introduced.
However, the bill is important because, as almost everyone has said in the debate, Scotland’s extremely abundant water resources are an invaluable asset to our country. It is right that we use the great natural advantage that we have to the benefit of our people, and that we share with others around the world our expertise in making best use of what is a precious, and in some places scarce, resource. Neil Findlay’s point about the nature of that overseas intervention is important; the political context of some countries and ownership of their water resources will be important factors for Scottish Water to take into account.
The ambition to have a successful and growing Scottish Water is the right one, which means that we must consider carefully any legislative changes to how we operate our water services. It is right that we are ambitious for the future of Scottish Water—with it remaining in the public sector—and for its roles as not only a service provider but a contributor to economic growth.
The future of Scottish Water has been keenly debated again today between those of us who believe that it should remain in public ownership and those who believe that it should be taken out of the public sector, including Mr Johnstone. To be fair, I thought that Mr Findlay was a bit uncharitable in describing Mr Johnstone as a vampire, with his “fangs dripping with blood”. Even I thought that that was going a little too far, but it shows how intense the debate can become. It is far from clear whether some of the additional resources that the proponents of privatisation or mutualisation of Scottish Water say would be released would, in fact, arise. Some of the economic arguments that are made in that regard are faulty.
However, it is without doubt important that we get the best possible performance from Scottish Water. That will certainly be expected by consumers in Scotland, who have just seen their water charges increase by 2.8 per cent. That increase is lower than increases in other parts of the UK, but it is an increase.
Parliament has an important role to play in ensuring proper and effective stewardship of our water resources. The issues can be contentious, but it is clear from the debate today that, by and large, the bill is not contentious. Perhaps the biggest question has been around the focus of, and necessity for, some of its provisions.
We agree that the hydro nation agenda should be promoted by ministers. Personally, I have been less persuaded of the need to place a legal duty on ministers to carry out the work—particularly as the legal duty has no effect. However, as Malcolm Chisholm said, it is vital work that needs to be happening on behalf of ministers anyway.
There are a range of opportunities for Scottish Water to expand its business, boost our economy and improve its services to customers, and it must seek out those advantages. In recent years, Scottish Water has had considerable success in many areas. However, as regards its economic focus and contribution, in the stage 1 debate I highlighted the submission to the committee by Jim and Margaret Cuthbert on Scottish Water’s approach to outsourcing activities and procurement, which they say has resulted in a situation in which
“management skills and”
research and development
“seem to be almost completely derived from outside Scotland.”
Since then, members in the cabinet secretary’s party have also highlighted that point, but it has not resulted in changes to the bill, so I hope that ministers—indeed, the cabinet secretary—will reflect on the issue in advance of the proposed procurement bill.
The measures in the bill that give definition to Scottish Water’s core and non-core services have received general support, including from us. We have also supported the proposal that the Scottish Government should be able to lend directly to Business Stream, and we have agreed that there is a clear logic behind new powers to enable licensed water and sewerage service providers to demand and recover charges from non-domestic customers in situations where payment is due, so there is a range of areas of agreement.
The amendments that Elaine Murray lodged focused on aspects of the bill as they touch on environmental issues; that has been a running theme throughout consideration of the bill. In its stage 1 report, the committee made the case that the definition of the value of water in the bill should include environmental and social elements, so we welcome the fact that the cabinet secretary took that on board at stage 2. However, Malcolm Chisholm has today expressed concerns about consistency in relation to parts 1 and 3 of the bill, which the cabinet secretary should address.
Abstraction is a major concern—as Mary Scanlon said—not least because it was not consulted on before the bill was introduced, which is a deficiency in the bill. There is also concern about duplication of regulation in that area, which is a problem for the businesses that are involved. That is deemed by the cabinet secretary not to be a problem in abstraction, but when it comes to peatlands it seems that it is. We are disappointed that the cabinet secretary has not included peatlands within the compass of the bill because peatlands are dealt with in other areas of legislation and the Scottish Government’s work. There has not been an impediment for the Government with regard to abstraction and a number of other areas. As Malcolm Chisholm said, peatlands are an important water-management resource, so that is an area of disappointment for us, but we are where we are.
On the additional powers that ministers have given to Scottish Water, the key is that Scottish Water works sensibly and in close co-operation with others that operate regulatory regimes so that we do not—where it might be a difficulty—have wasteful duplication of effort.
Our concerns about the bill are not so great as to prevent us from supporting it. The RACCE Committee has done a good job in debating and scrutinising the bill. Although we have reservations on some aspects of it, of course we agree that Scottish Water and our natural water resources represent an area of significant potential for Scotland. Ministers are right to focus on that. The bill, although it is limited in scope, is part of a much broader and important agenda, which is why we will support it.
16:48
I thank all members for their contributions to the debate. I was not involved in the pre-legislative stages of the bill, which were the consultations that took place. I came to the issue relatively late; the result of that has been—I do not mind admitting—a bit of a steep learning curve for me.
I agree strongly with Maureen Watt’s point; I, too, have thoroughly enjoyed learning about the issues that have been under consideration through the bill. The subject is hugely interesting and it is hugely important to Scotland. As Maureen Watt said, it opens up huge opportunities for people to get involved in water-resource management and all the associated issues, so I am pleased to have been involved in the bill. I am grateful to members who, through the committee and debates in Parliament, have played their part in making the bill what it is today—the bill that I hope Parliament will finally approve. Unsurprisingly, this has been a fairly consensual debate. I am glad about that.
Elaine Murray played a constructive role this afternoon. We were not able to agree to all the amendments that she lodged, but they allowed us to focus on important issues and, I hope, to develop a shared understanding of some issues that lie behind the bill.
Elaine Murray also said in her opening comments that she did not think that the bill had changed much. I disagree; I think that the Government has listened as the bill has progressed through Parliament. For example, we listened to the point that was made by many stakeholders at stage 1 that we had to be explicit not just about seeking to drive economic value in relation to water but also about the need to be mindful of social and environmental benefits, so we amended the bill to reflect those concerns.
We also made changes in response to amendments that were lodged by Jim Eadie around the reporting obligations on ministers. Where we have not been able to agree to amendments, we have nevertheless thought carefully about the issues, and some of the points that have been made will inform our thinking as we move towards drafting regulations and guidance.
Elaine Murray said that the bill is not radical. Again, I disagree. The bill is about recognising the enormous importance of our precious resources and it is also about making clear our commitment to managing those resources responsibly, and about recognising that that is not something that we do just for our own benefit, but is a responsibility and an obligation that we have to the wider world. That is radical in intent. The provisions in the bill and the provisions that will be in regulations and guidance that will underpin and give flesh to the bones of the bill will allow us to translate that radical intent into radical reality.
The other point that is worth making, which others have made as we have gone through the process, is that the bill is not the totality of an agenda but is part of a bigger agenda—the hydro nation agenda, which will see us becoming able to take advantage of and exploit all our resources and expertise responsibly and sustainably. That agenda is ambitious, radical and exciting, and I hope that members will support it for that reason.
My mind has been struggling for the last part of the afternoon with two competing images of Alex Johnstone: one that he put there himself of him lounging on a deckchair, and one that was supplied by Neil Findlay, which was of Alex Johnstone with his “fangs dripping with blood”. I am not quite sure which one I prefer. Alex Johnstone should not take it the wrong way when I say that Neil Findlay’s version is winning the battle of the images at the moment, probably because it fits better with my prejudices about Tories than does the other, more relaxed version.
Alex Johnstone spent much of his speech trying to—in his words—“explain the Tory position” on privatisation of Scottish Water. Despite what sounded like some protestations, it still seemed very much to me as if the Tories are in favour of privatising Scottish Water. As members in various parts of the chamber would, I would say that Scottish Water is working well as a public corporation; indeed, it is performing better than some private water companies. We should be proud of that and build on it. Of course it is the case that Scottish Water needs to work with others to discharge its responsibilities and further its ambitions, but it also operates in an intensely competitive commercial environment and does so as a successful public company. That is the way we should keep it.
Having said all that, I also say that Alex Johnstone has, throughout the progress of the bill, been very constructive in his comments and contributions, so I thank him for that. His contributions, in particular around abstraction, have strengthened the bill. We will ensure that we take account of some of the points that he made when we produce regulations on abstraction.
There have been many good contributions today. Gordon MacDonald raised some extremely well made points about climate change. Maureen Watt’s speech, which I have already mentioned, highlighted the need for a public awareness campaign on disposal of fats, oils and greases, which is a good suggestion to which we will give some thought.
Malcolm Chisholm’s speech—for all his protestations to the contrary—demonstrated a firm and clear grasp of the detail of the issues in the bill. He asked specifically whether obligations under the Sewerage (Scotland) Act 1968 would apply if the provisions on discharge of fats, greases and so on were applied to other public bodies. The principal obligation would be a requirement to apply for trade effluent consent licences. Given that that is an onerous administrative and financial burden, it would not be right to impose such a burden on bodies that Scottish Water tells us are not the offenders when it comes to discharge of those materials. We want to legislate for problems that exist rather than for problems that do not exist.
Mary Scanlon mentioned the importance of the regulations on abstractions. I can assure her that we will consult stakeholders in developing the regulations. As I am sure she is aware, the bill includes specific provision for ministers to leave certain water out of a count when calculating an abstraction. We proposed that to cover, for example, cooling water that is returned to the water environment. I hope that that reassures Mary Scanlon and stakeholders such as the whisky industry, which has been particularly concerned about that point.
Richard Baker also made some good points in his speech, including on peatlands, which we discussed in the context of an amendment from Elaine Murray. If I may try my best to simplify the issue, I say that I think that it would not be right to include peatlands in the bill not because peatlands are unimportant—as he rightly pointed out, peatlands are dealt with in other work and are given a specific chapter in the draft report on policies and proposals 2—but because, in summary, peatlands are, as their name suggests, a form of land, whereas the bill is about water resources in the conventional sense. That is why the judgment has been taken that it was not appropriate to include peatlands within the scope of the bill.
I think that I have covered most of the contributions to the debate. If I have missed anyone out, I apologise for that.
On the issue of the 10-megalitre abstraction limit that I raised earlier, given that by law whisky can be produced only in Scotland, will the Government consider any request from the whisky industry to distil more than 10 megalitres?
We will continue to discuss with the whisky industry and other stakeholders those details as we develop regulations. I will reflect on the point that Mary Scanlon has made.
Let me conclude my summing up by saying a word or two about Scottish Water, which has understandably featured strongly in this afternoon’s debate. Scottish Water is a public sector success story. Now in its 10th year, Scottish Water is an organisation that we can be extremely proud of, given that it has delivered significant efficiencies, reduced leakages—although I take Mary Scanlon’s point that there is work still to do—and built new infrastructure. Scottish Water continues to be ambitious for the future and must continue to drive forward with efficiency to ensure that its assets are resilient and meet the needs of customers.
In that regard, on Monday this week I was pleased, along with its chair and chief executive, to launch Scottish Water’s massively ambitious plans for investment in the infrastructure of the Glasgow and Clyde area. Over the next five years, that investment will include expenditure of £250 million—perhaps £500 million in total—which will support 500 jobs and ensure that Glasgow has the infrastructure that it needs to continue to grow. We will continue to challenge Scottish Water to do more and to go further not just at home but by looking for opportunities abroad.
In conclusion, I look forward to continuing to work with stakeholders as we take forward the provisions of the bill into regulations and guidance to ensure that the provisions play their full part in the development of the hydro nation agenda. Water underpins every economy, and in Scotland we are well placed to ensure that it plays a full role in our future prosperity. This is a new and exciting agenda, and I am confident that we will all rise to the challenge of it.
Therefore, I am pleased to commend to Parliament the motion that the Water Resources (Scotland) Bill be passed.