Water Environment and Water Services (Scotland) Bill: Stage 1
Today's first debate is on motion S1M-3236, in the name of Ross Finnie, on the general principles of the Water Environment and Water Services (Scotland) Bill. As soon as Mr Finnie has put away his fish, we will start on the water.
If only Mr Finnie had some fish to put away, we might not be in the situation that we are in.
I am pleased to open the debate, which is the Parliament's first opportunity collectively to discuss the Water Environment and Water Services (Scotland) Bill. In many ways, the bill is one of the most important pieces of environmental legislation that has come before the Parliament. Increasingly, the protection of water as a resource is recognised the world over as a fundamental necessity. At the recent sustainable development summit in Johannesburg, water was one of the key issues. The problems that we face are of a different scale, but their solution depends on the same model of holistic management of the water environment that the summit endorsed.
Scotland is lavishly endowed with rivers, lochs and coastal waters of outstanding natural beauty, so we have good cause to be concerned. We have harnessed the power of water for the greater social good. Our extensive network of hydroelectric schemes is a triumph of engineering in the service of social and environmental needs. However, the crux of the matter is that in the past we have not necessarily served our waters as well as they have served us.
We have improved the quality of our rivers and bathing waters, but we must do more. For example, the examination that my colleague Allan Wilson is conducting has revealed that concerns are still being voiced about the environmental impacts of fish farming. The bill will allow us to focus much more on the process of fish farming rather than exclusively on discharges, as at present.
The bill will also give us powers to tackle environmental problems that, heretofore, we have been unable to address. We will have new powers to control engineering works in the water environment. The consequences of such works for habitats that are important for otters and other animal life can be devastating. It is time that we analysed properly the environmental impact of such proposals.
The bill will also give us the power to control water abstraction where necessary. Those who abstract in a manner that is sensitive to the environment should in no way fear that power. Despite our obvious wealth in water resources, we face problems of over-abstraction in certain parts of the country at certain times of the year. The bill will allow us to balance the rights of one group to extract against the rights of others to pursue other, environmental pursuits.
On that balance of rights, will the Executive continue to protect the provision of water not on the basis of making profit for private suppliers, but on the basis of maintaining the public supply? In other words, will the Executive use the abstraction rights to prevent the privatisation of our water via private companies' trying to get into our mains?
I understand the question, but the introduction of competition by the back door will undoubtedly be more properly controlled through whatever eventually emerges from any competition restrictions that might be introduced to the framework set up by the Water Industry (Scotland) Act 2002. The Water Environment and Water Services (Scotland) Bill will properly balance the rights of users and other people. One could take the view that those in the whisky industry who are abstracting water are doing so for commercial gain, but I do not think that that is what Mr Sheridan has in mind. He is talking about mains water. It is difficult to draw the distinction, but the issue will be dealt with more properly if we ever have to control competition in the Scottish water industry.
The bill is also flexible in its approach—I emphasise that point, as flexibility is crucial. The bill does not represent or promote regulation for the sake of regulation; it considers water use in the round, balancing environmental goals with economic and social ones. Only where real environmental harm is being caused will action need to be taken.
The crucial question is how the new powers in the bill will be given effect. At the centre of the bill's approach is the concept of river basin management planning. Everyone with an interest in Scotland's waters will have the opportunity to become involved: those who are involved in textiles, distilling, agriculture or hydropower; the non-governmental environmental organisations; those who use the waters recreationally; and, crucially, domestic consumers and communities who live beside the waters.
The Scottish Environment Protection Agency will take the lead. Concerns have been expressed about SEPA's ability to manage the huge, new responsibility. However, as members are aware, we recently awarded SEPA an extra £11 million over the next few years to improve the way in which it protects our environment. A significant amount of that extra resource will be used for the implementation of the bill.
SEPA will be engaged in a four-step process. Step 1 is that SEPA will be required to carry out an analysis of all human impacts on the water environment. Step 2 is that that analysis will be put to use to establish the environmental objectives for individual water bodies—river stretches and whole or parts of lochs or estuaries, for example. Having established environmental objectives for specific bodies of water, the river basin planning process will then move to step 3—the determination of what measures require to be put in place to achieve those objectives. Thereafter, we will move to step 4—implementation, when the new control powers that I have described will kick in. Those powers will be used only to achieve the objectives that are set out in the river basin management plan.
That is a synopsis of the powers that are laid out in part 1 of the bill, which is the part on which most of the debate and the stage 1 report have focused. I record my thanks to the Transport and the Environment Committee for its detailed and thoughtful consideration of the bill. The committee's support for the general principles of the bill is welcome. The committee also made a number of comments and requested clarification of aspects of the bill. Committee members will, I hope, have a copy of my letter to the convener, dated 25 October, in which I deal with the issues that the committee highlighted to be addressed in advance of the debate. I shall run through those issues quickly.
There is no question that, through the bill, we have asked the Parliament to sign a blank cheque. We have done our sums. The bill is largely enabling but—quite rightly—the Finance Committee and the Transport and the Environment Committee have demanded of us a robust assessment of what the price tag will be. That we have done. The figures in the financial memorandum and the other supporting materials set out a range of anticipated costs, including the costs of the secondary legislation under the bill. We have also commissioned and made available a series of business-case assessments.
For two main reasons, we cannot describe with certainty today on whom all the costs will fall and how much they will be. First, we are introducing a planning system that will involve analysis, assessment, evaluation, consultation and debate by a wide range of organisations. The outcome of that system will ultimately determine the precise costs. Secondly, a number of key pieces of secondary legislation will be cost drivers. We have not yet consulted on those, so costs can be expressed only in ranges and not in absolute terms.
As I said in my letter to the convener of the Transport and the Environment Committee, the bill is about ensuring that a planning system is in place that involves all the parties that I mentioned and that balances environmental goals with social and economic priorities—a planning system that delivers sustainability.
Significant benefits come from investment in the protection of the environment. It is not simple to attribute a value to those benefits, but that does not mean that they do not exist. We employed one of the leading experts in the field, Professor Hanley of the University of Glasgow, to make a value assessment. He used the most up-to-date techniques available, but he did so with caution, not allocating value to benefits where the level of uncertainty was too great. I do not want to repeat the information from my letter about the techniques that he used, but I am confident that his estimate of benefits of between £131 million and £325 million a year is not an exaggeration.
The crux of the bill is getting the river basin planning system right. It is clear from its stage 1 report that the Transport and the Environment Committee agrees. We want to create a system that not only is open and transparent, but is effective and delivers results.
I am grateful to the committee for agreeing that having one river basin district for Scotland is a sensible approach. As a result of that approach, we need to ensure real engagement of interests at a more local level. The committee's report recommends that the bill goes further to provide for an all-Scotland network of advisory groups. I made it clear in my letter that we support that approach. The bill has extensive powers to guide SEPA on how river basin planning should be made operational, but I will consider whether the bill can do more to deliver that common goal.
The committee's other main concern is the subordinate legislation procedure. I will deal with that issue briefly, because I covered it in my letter. The bill is largely enabling and it is vital that we get right the subordinate legislation that will flow from it. The committee's view was that we had the balance wrong. We are considering that issue again and will lodge any necessary amendments at stage 2. I have undertaken to lodge an amendment to provide that an order under section 4 of the bill that designates river basin districts should be subject to the affirmative procedure. I repeat that undertaking today.
I will quickly respond to other issues. The Executive and the Parliament share a common desire to ensure that we have a sustainable aquaculture industry. The bill will help us to deliver that. It will provide for more effective regulation by SEPA of fish farms and their operation. Another element of that drive for sustainability will be to give local authorities planning responsibility over marine fish farms. The Executive is committed to introducing the necessary controls. However, my view remains that the bill is not the best means of achieving that change.
Environmental considerations are, of course, key to the planning process, but they are not the only considerations. Amenity issues and issues about the appropriateness of existing infrastructure to cope with proposed developments are also important. Extending planning controls to cover marine fish farms represents a significant change to the planning regime. It may be desirable for the bill to deal with those planning controls, but I am not persuaded that it is appropriate for the bill, which has a clear focus on the water environment, to do so.
Flooding was another important issue that the committee raised. I know that many members have to deal regularly with that issue. The Executive is serious about tackling flooding. We are reviewing administrative systems and the statutory procedures required by existing flood prevention legislation, but it is too early to say whether legislative changes will be required.
The bill will help to bring together those who are interested in flood prevention—local authorities, businesses and communities—at a river basin scale, which is the right scale to think about and plan strategically for flooding issues and consider the impact of climate change on the water environment. The committee has made a number of suggestions about how the bill could ensure that that happens and I will, of course, consider those. However, in this context, it is important to bear in mind the fact that section 10 of the bill will give powers to specify the issues that must be covered in a river basin management plan.
Part 2 of the bill changes the way in which the cost of providing water and sewerage infrastructure for new housing developments is funded. It is about creating a fair and transparent process to replace the ad hoc arrangements that exist at present. I am pleased that the Transport and the Environment Committee endorsed those provisions in its stage 1 report.
Current legislation requires Scottish Water to provide connections to the mains where it is practical to do so at a reasonable cost. However, as there is no definition of "reasonable cost", in practice developers provide the infrastructure for the connection and Scottish Water pays them about £1,500 per property in lieu of reasonable cost. We do not believe that developers should receive an automatic subsidy from Scottish Water on more or less every house that they build. Instead, they should normally expect to provide the infrastructure as part of the development. Where they do so to Scottish Water's standards, they should be entitled to connect to the mains. The bill provides for that. There are instances where it might be appropriate for Scottish Water to contribute to a particular development, most obviously in the case of some low-cost social housing where a contribution could be important to the success of the development.
Clearly, the regulations under part 2 will be of great interest to a range of groups. I am happy to confirm that we have always intended that they should be the subject of the fullest consultation with local authorities, developers, housing associations and others affected by them. I want to make it clear that the regulations are introduced by Scottish ministers, not by Scottish Water.
The bill is ambitious—I make no apologies for that. Part 1 of the bill is our opportunity to ensure that Scotland's water is protected for future generations and that the goal of sustainability that was supported by all sides at Johannesburg is delivered here in Scotland.
Our rivers, lochs, coastal waters and groundwaters are the lifeblood of our society. We drink from them. We eat from them, too. We harness their power and we exploit their resources in myriad ways. We base our towns and villages around them. The bill is about protecting that heritage. I look forward to the detailed debate at stage 2 on the issues that I have talked about, but, for now, I move,
That the Parliament agrees to the general principles of the Water Environment and Water Services (Scotland) Bill.
I welcome the pragmatic approach that the minister has taken this afternoon, although I do not support all his announcements. It is a pity that we do not have enough time today to talk about all the good things in the bill and I will instead have to focus on some of the areas in which there must be improvement. However, there can be no doubting the importance of the bill: it represents a real chance to safeguard Scotland's rich water resource and to continue the process of reversing decline. Just as important, the bill provides unique opportunities, if we are prepared to grasp them, to secure considerable social and economic benefits.
In the past, United Kingdom Governments have been slow to react to European environmental legislation. The Scottish Executive, to be fair, cannot be accused of being slow off the mark in relation to the water framework directive and it deserves recognition for the efficiency of its response. However, we and others have concerns about the efficacy of some of its proposals.
The Transport and the Environment Committee and the Finance Committee have highlighted what they believe are shortcomings in the bill, most of which can be addressed at stage 2. The committees are to be congratulated on their thorough scrutiny of the Executive's proposals.
One of the areas in which there has to be improvement is flooding. In its report on the bill, the Transport and the Environment Committee said that
"one of the most obvious ways in which it will be possible to judge where the WFD has made a difference will be in relation to Scotland's ability to take preventative measure to reduce the incidence of flooding over the coming years."
The word "preventative" is important in that context. This winter, we will again witness major flooding events across the country being tackled with sandbags and canoes. In effect, we are asking people to fight a losing battle. We are tackling the symptoms and doing nothing to prevent future flooding events.
I have seen at first hand in Perth the utter havoc and hardship that flooding can bring to ordinary people's lives. In retrospect, it is incredible that we allowed sprawling housing estates such as exist to the north of Perth to be built on natural flood plains. Had agricultural practices further upstream not interfered even further with the natural flood plains, the scale of the flood defence works for Perth could have been much reduced.
We must ensure through the bill that human activity does not in future unnaturally constrain a river to the detriment of people and biodiversity alike. The Transport and the Environment Committee has made some important recommendations in that regard. Those recommendations would improve the situation and I am glad that the minister will consider them, although I do not believe that they go far enough.
I do not want to divest local authorities of the important powers that they have in regard to flood defences. The councils are the relevant bodies: they have the technical skills to deal with such matters. When it comes to flood defences and dealing with the consequences of flooding, councils can do a good job, as they have shown. However, when it comes to understanding a whole river system and taking a more preventive flood-avoidance approach, they do not have the expertise, wherewithal or powers to act appropriately.
I know that the bill provides for river basin management plans, but the bill's provisions—even with the Transport and the Environment Committee's improvements—do not provide a robust enough framework for dealing with the growing menace of flooding. We need to develop a national plan or strategy to deal with flooding in an integrated manner throughout Scotland. We cannot go on with the sandbags-and-canoe strategy that we have at present. We need a structure that can ensure that a strategic, focused and consistent approach is taken at river basin level and sub-basin level.
The current position will inevitably perpetuate a fragmented approach, with ad hoc policy and decision making that will end up being costly to the taxpayer and fail to make the expected environmental improvements. I urge the Executive to reconsider its position. To develop an appropriate strategy would be to do no more than is already done in, for example, the national waste strategy plan, through which SEPA has an overview.
I conclude with a look at the financial implications, as they are important for the bill. At
5 pm today, we will be asked to vote not only on a bill whose principles are sound, but on the financial resolution that supports it. However, the reports from the Finance Committee and the Transport and the Environment Committee provide grim reading on the adequacy of the financial memorandum.
The Finance Committee report tells us that various arms of government—Scottish Water, Scottish Natural Heritage and the local authorities—were unable to quantify the likely costs of the bill for their organisations or how those costs might be paid for. Indeed, Scottish Water felt obliged to state that it would be
"extremely difficult—if not dangerous—to put a figure on the costs".—[Official Report, Finance Committee, 10 September 2002; c 2173.]
That void of information is alarming, given that the customers will ultimately have to bear the costs. The Finance Committee felt so strongly about the issue that it questioned whether the bill should complete stage 1 without further specification of costs.
The minister provided more information in a letter to the convener of the Transport and the Environment Committee on 27 September. Unfortunately for the minister, that additional information cut no ice with the committee, which, in its stage 1 report, also recommended that the financial matters be resolved before the bill's principles were agreed to. The minister tried again to get the committee on board in a letter dated 25 October, as he said. However, incredibly, the minister conceded in that letter that all the information that could be provided had already been provided. That means that, despite the fact that the minister has failed on two separate occasions to provide the robust financial information that the committees sought, he still expects the Parliament to agree to the financial resolution.
I have considered closely WRc plc's report, on which the minister has placed so much credence today. I understand the difficulties of trying to forecast long-term costs. However, that consideration has raised more concerns and questions, not least of which is why we have not seen any evidence or comment from the group that will be hit hardest by the costs that the bill will impose. The agricultural sector will bear the largest burden of the costs—more than £250 million—yet we have no real idea how it will meet them.
The report "Evaluating the Economic Impact of Abstraction Controls on High and Medium Volume Water Users in Scotland" was published just last week. It raises even more uncertainty. I quote from page 5 of the report, on sectoral impacts:
"The evidence suggests that the Directive may raise issues of catchment sensitivity for the distilling, fish farming, agricultural and paper sectors. Because of limited information on groundwater status it was not possible to draw any general conclusions about the possible impacts of the Directive on sectors abstracting groundwater."
With regard to additional capital expenditure requirements on the part of Scottish Water, the report says:
"It was not possible to calculate with much precision the likely additional capital costs to Scottish Water. This can only realistically be done when licence conditions are established and least cost options investigated."
All that information came too late for either the Transport and the Environment Committee or the Finance Committee to scrutinise it, but it adds to a picture of confusion and uncertainty over costs.
In effect, the minister is asking us to take a leap in the dark with him as far as future costs are concerned. The whisky industry, for instance, already contributes almost £600 million in excise duty alone to the United Kingdom Treasury, yet the minister asks us to take that leap in the dark on the charges that will be levied against the industry for abstraction.
No one expects the eventual legislation to have a cost-neutral impact—that would not be possible—and there is no doubting the fact that the benefits that it will bring will be significant. However, it is up to the minister to provide robust information on the social and economic costs of a system of management that is currently failing us; to provide tangible and realistic future costs of implementing the bill; and, on the positive side of the equation, to provide much more detailed information on future cost benefits and savings.
The Scottish National Party will be voting for the bill today, but the minister will have to go a long way to persuade us to vote for the financial resolution, because we sincerely believe that the financial resolution is weak and that the background information supplied was not adequate. We support the Transport and the Environment Committee and the Finance Committee in their views. For us, as a responsible Opposition, to proceed otherwise on the financial resolution would be folly.
I declare an interest as a farmer.
"Water, water, everywhere,
Nor any drop to drink."
Today, we find ourselves in a position a bit like that of the ancient mariner, burdened as we are with seeking to transpose the European Union water framework directive into Scots law.
We note the Executive's motion, which we will support because the proposed enabling legislation is, by and large, not contentious. That said, the EU water framework directive recognises that each member state should have flexibility in implementing the directive appropriately. We welcome the recognition that a one-size-fits-all approach is not appropriate.
Although that flexible approach is welcome, it is where differences creep in. That is why today's stage 1 debate is so important. We support the principle of establishing single river basin management plans, with sub-basin management plans to support them. An holistic approach needs to be taken on the creation of river basin management plans, but more work needs to be done to achieve an integrated approach that takes into account environmental, agricultural and forestry policy objectives. Unless an integrated approach is taken, taxpayers' money may be spent pursuing contradictory policy objectives, which must be avoided at all costs.
Speaking of costs, we also have reservations about that key aspect of the bill. Prior to September 2002, the Transport and the Environment Committee had no real indication of what the cost of implementing the bill would be—a glaring deficiency in the Executive's proposals. Ross Finnie's letter of September 2002 made the Executive's position a bit clearer and gave a range of implementation costs. Those costs will be low in relative terms until 2006 and will be borne almost entirely by SEPA. Thereafter, costs to a variety of sectors will be between £60 million and £100 million annually for the four years from 2006 to 2010. The Executive has estimated that the cost will be £83 million annually.
We must hope that the estimates for the costs of the bill are accurate, because if they escalate significantly the already heavy burden of £83 million on industry and other areas will become crippling. Much will depend on the secondary legislation that has yet to be introduced. However, the Conservative party seeks today an assurance from the minister that the Government and any future Administration will be bound to keep future costs within the limits that are outlined in Ross Finnie's letter of September 2002 to the Transport and the Environment Committee.
Costs beyond 2011 will also be significant and will impact heavily on hydropower generation, agriculture and mining. We must set the benefits of the bill against those costs, which the financial memorandum estimates will total between £141 million and £324 million. However, the Finance Committee views those figures with considerable scepticism, which I share. That committee noted:
"The calculation of these benefits is in our view subjective".
It comments robustly that it is
"misleading for the Executive and others to seek to rely on such figures which can in no way be substantiated."
Given the Executive's assertion that there will be significant benefit, it is surprising that evidence on the matter has been neither sought nor received from VisitScotland. Is that a failure of Government, of VisitScotland or of both? Is the truth that it is impossible to provide evidence that would demonstrate the benefits that the Government claims? Time will tell whether the benefits of the bill will outweigh the costs, but those costs will be a significant burden on Scottish Water and other businesses throughout Scotland, many of which are as yet unaware of the financial impact that the bill will have on them.
In our view, too many proposals will be implemented through subordinate legislation. Affirmative rather than negative procedure must be used in conjunction with adequate consultation. The proposals are unacceptable as they stand, although I welcome the comments that the minister has made on the matter today.
I note with regret Tricia Henton's resignation from SEPA last week and I pay tribute to her for the sterling work that she did during her time in office. The role of SEPA's next chief executive will be extremely demanding, given the Government's intention that the organisation should on the one hand make policy and advise Government, and on the other act as the regulator and enforcer of policy. That is a classic case of "Who guards the guardians?" Greater parliamentary and ministerial input will be required than has been outlined so far.
Flooding is a key issue with which the bill deals inadequately. Recent flooding throughout Scotland and the UK has again emphasised the scale of the problem that we face as global warming takes effect. In my view, some local authorities will in future require help and expertise to create flood management solutions. Although that expertise might be available from the private sector, if it is unavailable in-house in local authorities, SEPA will need to be able to take an overview of flood management throughout Scotland. As a result of global warming, river basin management plans—incorporating flood prevention plans—will require significant additional funding from the Government. History suggests that funding will be inadequate to meet demand and that a bid system will have to be put in place so that funds can be allocated to the most needy projects.
The evaluation of bids will have to be carried out either by SEPA or by the Government. It is unreasonable to expect that, as the situation stands, SEPA will not have a role to play in that process, given its projected role as policy maker, adviser, regulator and enforcer of river basin management plans. SEPA is the only organisation that is able to deliver to Government a coherent, informed and uniform approach throughout Scotland. How else in future could projects be evaluated for Government? I do not suggest that SEPA should be responsible for funding or for carrying out any engineering works that are required; I suggest that it should be involved only in flood management planning and evaluation of the bidding process that will emerge.
A new process of flood management project evaluation that is similar to the Scottish transport appraisal guidance may emerge. That would ensure that a consistent—rather than a political—approach was taken to funding more projects. I suggest that the Government will need to consider that in the near future.
I turn to aquaculture. We in the Conservative party believe that there is an urgent need for the transfer of planning powers from the Crown Estate to local authorities. On part 2 of the bill, steps must be taken to clarify the Government's position on infrastructure installation and the maintenance of sustainable urban drainage systems. Obstacles must not be put in the path of our continuing to develop social rented housing in rural areas, and the affordability of such projects, whether to the state or water consumers, will need to be debated by the Parliament on another occasion.
We welcome the bill subject to the concerns that I have expressed and those that my colleagues will express. We look forward to lodging appropriate amendments at stage 2. In the long term, the bill should deliver an enhanced and more sustainable water environment which, provided that it can be delivered cost-effectively, will be of benefit to future generations.
It is a great privilege to open for the Labour party. The minister made clear in his introduction the benefits that he thinks implementation of the bill will bring to the water environment in Scotland.
As we consider the bill at stage 1, it is important to note that in all the evidence that the Transport and the Environment Committee took, not one organisation—industrial, environmental or public sector—did not want the bill to proceed. It is also important that we acknowledge that part 1 of the bill meets the Scottish Executive's obligations on implementing the water framework directive. Scotland is required to implement the directive and transpose it into domestic legislation by December 2003. Part 2 of the bill relates to measures concerning water services.
As Bruce Crawford said, the Executive is to be commended for being well ahead of the game on this occasion in meeting Scotland's obligations to implement European Union directives earlier rather than later. We should commend the minister and all the bill team for that achievement. We have the opportunity to be ahead of the game when it comes to dealing with much of the subordinate legislation that other members mentioned and the costs of that, to which I will turn later.
It is important for us to concentrate on the general objectives of the water framework directive. Those objectives are about preventing deterioration of the status of surface water in Scotland; protecting, enhancing and restoring surface water by 2005; preventing deterioration of the status of groundwater; and preventing or limiting the input of pollutants in groundwater and reversing significant pollution that already exists. As I said, another objective is that we must comply with our European obligations. It is no surprise that those general objectives in the bill have to date attracted common support.
From this point on I will touch on a few of the issues that came up as the Transport and the Environment Committee considered the bill with the various groups that contributed. Before I go into those detailed issues, I emphasise a point that the minister made when he gave evidence to the committee: aside from the direct benefits—such as cleaner water—of implementation of the water framework directive, there will be indirect benefits to Scotland, for example to the whisky industry, which markets itself heavily on the purity of the water that it uses, and to the tourism industry, which markets itself partly on the basis of Scotland's natural beauty, including its water quality. We should remember those points as we consider the bill.
Does the member accept that the whisky industry markets itself on the basis of the distinctiveness of the water that it uses, but not necessarily on the basis of the purity of that water? The water might have peat or mineral content that is derived from its origins.
I accept Mr Monteith's general point, but I suggest that if there were a general degradation of Scottish water in the future, that would be enormously damaging to the whisky industry. I am sure that the industry would concur with that point.
The areas that I want to discuss that other members have mentioned include costs and benefits, the river basin management regime, flood management, active participation, aquaculture, planning powers and part 2 of the bill.
On costs and benefits, the Finance Committee expressed strong concerns in its report to the Transport and the Environment Committee. I am sure that Des McNulty, as convener of the Finance Committee, will touch on that later. We should acknowledge that the minister has gone a long way towards addressing those concerns and has provided much more clarification. When the Transport and the Environment Committee took evidence on the financial aspects of the bill, many of the organisations on which costs might fall were not clear about the costs for which they would be liable and many seemed to anticipate significant costs even in the early years.
The information that the minister has brought to our attention has significantly clarified that issue. In his letters of 27 September and 25 October, the minister made it clear that the estimated costs include the on-going costs that relate to the statutory instruments that will be associated with the implementation of the water framework directive.
Will the member confirm that the Transport and the Environment Committee still expressed reservations about costs in its report, in spite of its consideration of the letter from the minister of 27 September? When Bristow Muldoon mentions the letter of 25 October, is he speaking on behalf of the Transport and the Environment Committee or on behalf of the Labour party?
I have made it clear that I am speaking on behalf of the Labour party—I said that in my introductory remarks.
In its consideration of the minister's earlier letter, the committee acknowledged that it was grateful for the financial information, which the Executive had provided in an extremely short time scale. The minister further clarified matters in his letter of 25 October. [Interruption.] Mr Crawford should not interrupt from a sedentary position.
The financial costs aside, we must acknowledge that the bill offers considerable benefits to Scotland's environment and economy. Ross Finnie emphasised that in his letter of 25 October, which identified the positive impact that the bill will have on sustainable development of the water environment. It is important that we do not focus solely on pounds, shillings and pence when we assess the bill's benefits.
On the Executive's proposals on river basin management planning, I welcome the idea of having a single river basin district to cover most of Scotland. Active participation is a related issue and it is important to ensure that we meet our obligations in that regard. Article 14 of the water framework directive requires member states
"to encourage the active involvement of all interested parties in the implementation of this Directive, in particular in the production, review and updating of river basin management plans".
Therefore, I encourage the Executive to consider the Transport and the Environment Committee's recommendation that SEPA should have a duty to establish such sub-basin plans throughout Scotland.
The Transport and the Environment Committee made significant recommendations on flood management, which we hope the Executive will take on board. I welcome Ross Finnie's commitment to consider the issue further and I acknowledge that the national planning policy guideline on flood management is under review. I encourage the minister to reflect further on that.
The passage of the bill and the implementation of the water framework directive will have considerable benefits for Scotland's water environment. I encourage members to support the bill at stage 1.
I am obliged to all speakers for observing the time limits in the opening part of the debate, but time remains tight so can we please have speeches of four minutes?
The bill is self-evidently in three parts. Part 1 transposes the water framework directive and part 2 completes the regulatory framework for Scottish Water. I flag up the importance of private water supplies. Although they are the responsibility not of Scottish Water, but of local authorities, we should ever be mindful of private water supplies, because they raise many issues. Part 3 is the housekeeping element of the bill and raises important issues about the scrutiny of provisions that are made through secondary legislation.
We must implement the water framework directive. It is widely agreed that that will be a good thing to do and that it presents a great opportunity; there is much enthusiasm for the task, but it is important that we do it properly. We have the benefit of transposing the directive into Scots law timeously, but it is important that we also proceed timeously with implementation or, to be more accurate, with the mechanics and the systems that will enable implementation. I do not want to pick up all the problems that might result from leaving implementation work until we are up against the deadline. It might look to be a comfortably long way ahead, but it is not when we consider other matters, which I will list.
First, industries and businesses that gave evidence made it clear that the more time they have to prepare once they know what will be required of them, the better. Secondly, the water framework directive demands active participation by stakeholders—it will not be good enough to hand down river basin management plans. It will take time to decide how to produce the plans and building them up will take time. Thirdly, data collection to inform actions properly will also take time.
One river basin district will cover most of Scotland, but it is essential that we have sub-basin plans. The more local we can make those plans, the more effective they will be. However, much work will have to be undertaken on establishing optimum sizes and structures and some useful models of good practice exist on which we can draw, so we are not starting from square one. I mention in particular work that has been undertaken on the Tweed in the Borders and the Ugie in the north-east. I was pleased to hear what the minister said about involvement, local plans, being local and involving people. People become involved when they have local concerns.
Flooding, flood risk assessment and flood management are inescapable issues in planning for a natural water system. The Transport and the Environment Committee did not consider it necessary to change where overall responsibility lies—with local authorities—but it will be important to ensure effective collaboration and solid co-ordination among flood planning, river basin planning and land use planning.
While I am on local authorities and planning, a good opportunity exists to progress the transfer of planning powers for aquaculture, which people agree should happen. We have an appropriate opportunity to do that, rather than waiting perhaps two years for a planning bill.
Concerns have been expressed about the implications of the measures in part 2 and the minister's comments on that were helpful and welcome. A major concern is that, because the bill is largely enabling, much of what is needed to achieve the water framework objectives will be introduced through secondary legislation. I, and many other people, think that it would be good for thorough discussion and scrutiny to ensure that much of that secondary legislation is introduced under affirmative procedure and perhaps with consultation on draft instruments.
I do not propose to say much about the bill's financial implications for two reasons—
You have no time.
I have two sentences left. Much will depend on the eventual shape of measures, which we should deal with quickly. I believe firmly that it would be much more costly not to do the work than it would be to do it.
I speak as a Finance Committee member. Most members of that committee came to the bill fairly cold. When we received our papers on the Friday before the meeting in which we dealt with the bill, that was probably the first time that most of us had looked at the bill. When we read the financial memorandum, we felt concern because it left questions unanswered.
It is interesting to read in the Official Report of that Finance Committee meeting how the questions to the witnesses from Scottish Water, SEPA and the Executive became increasingly robust as the exchanges progressed, and how the committee's disenchantment increased. By the end of the meeting, most members—regardless of their party membership—were more concerned than they had been at the beginning of the meeting. Those concerns are reflected in the Finance Committee's report to the Transport and the Environment Committee; the following quotations will explain why that was the case.
Alan Alexander, the chairman of Scottish Water, told us that
"the bill's financial consequences for Scottish Water are difficult to quantify".
If we are to learn from experience, it is important to note that Jon Hargreaves, the chief executive of Scottish Water, said when speaking about European directives:
"The cost of implementing other directives … has been far higher than was initially estimated."
That was an understatement.
Michael Kellet, of the Scottish Executive, said:
"It is difficult to be firm about costs at this stage".
In the light of that, anyone could understand the Finance Committee's concerns.
I am sorry that Tom McCabe, the member for Hamilton South, is not in the chamber today, because he really enjoyed himself at that meeting of the Finance Committee. As part of a question to Michael Kellet, Tom McCabe said helpfully:
"My experience of the public sector is that, when people speak in broad ranges and do not want to define eventual costs, it is because they know that the costs will be high".
Michael Kellet of the Scottish Executive replied:
"That takes us into the context of the next spending review".—[Official Report, Finance Committee, 10 September 2002; c 2167-91.]
We will have by then another chancellor, another Executive and another First Minister, so it will be okay.
The Transport and the Environment Committee report includes a quote from Ross Finnie, who said that the bill
"will put us ahead of the game across Europe".
Given our record on many other aspects of the environment, that is fine and laudable, but we have to remember that costs will precede the benefits of implementation of the measures in the bill. Given the number of different groups, enterprises and—more important—commercial organisations that the bill will affect, being ahead of Europe will mean that our costs will also come ahead of those that are to be introduced in Europe. Scottish Water and SEPA have made it very clear that the costs will be passed on. SEPA will pass costs on to Scottish Water and Scottish Water will pass them on to the consumer. The costs will be borne by industry, which will have to bear them before its competitors in Europe do so. It is important that we note that at a time when Scotland has been officially recognised as being in recession.
When European Union directives are applied to the United Kingdom, there is a suspicion in many areas that we gold plate the regulations when other countries do not. If there is any truth in that suspicion, it will cause great concern in respect of the bill, because it will have consequential detrimental and differential effects on our industries.
I want to touch on the use of statutory instruments. The minister said that the process will be okay, because the instruments will be subject to affirmative procedure so that the Parliament can scrutinise them, but the problem with affirmative instruments is that they cannot be amended. We must either agree to or reject such instruments in their entirety. Pressure will be put on the Parliament and its committees to pass an instrument and not to reject it simply because of certain imperfections that it may contain.
We have a duty to inform our constituents and the electorate that the financial memorandum to the bill is not clear. It should be rejected for that reason.
I welcome the bill. As colleagues have said, it is an important bill that will enable sustainable development of our water environment.
I want to highlight the quality of the Transport and the Environment Committee report. Here is an instance of a committee producing a serious and systematic analysis of a proposal from the Executive. The bill will be improved substantially if the Executive takes note of the points that are made in the report.
I hope that ministers have got the message about finance—I mean not only the ministers who are in the chamber, but other ministers who introduce financial memoranda in the future. The Parliament wants clear, or as clear as possible, specification of what the legislation is likely to mean in terms of finance. The fact that implementation of the bill happens to be a long way away is not necessarily a good reason for a lack of precision in the way in which the bill is introduced.
I acknowledge that some forms of expenditure are hard to quantify—indeed, they might be impossible to quantify—but there is a duty on ministers and the members who are involved in scrutiny of legislation to ensure that we get the most detailed specification possible and that we are clear about the costs that will likely be entailed.
I want to highlight one or two issues in the bill that have not yet been mentioned in the debate. For example, paragraph 71 of the Transport and the Environment Committee's report refers to the importance of natural wetlands as far as water quality and flooding are concerned. The same paragraph mentions that agribusiness strategies should be linked to the water management strategies that we are trying to adopt. It is important that we take a joined-up approach to the issue. The Executive's policies should not only relate to each other, but work in the best interests of making the environment as good as it can be.
I agree with some of Bruce Crawford's comments about flooding—for example, that we must have co-ordinated flood management systems. Indeed, we might well have to come up with a national flooding strategy, not just because it is required in Scotland. I suspect that, in due course, the requirement for flood management strategies to be considered by and between member states will form part of modifications to the water framework directive.
However, I disagree that responsibility for that task should be handed over to SEPA or to Scottish ministers. SEPA's role centres not necessarily on water management, but on maintenance of water quality. It will not achieve anything if we cast Ross Finnie or some other minister in the role of Canute and make him try to hold back the flood without the resources or the power to do so. That needs to be done by local authorities, perhaps not individually but in combinations, in the context of sub-basin management plans. Authorities must get involved with one another and with other partners, which is what the bill will push for them to do.
Finally, I want to mention sustainable urban drainage systems which, as members who have served on the Finance Committee and the Transport and the Environment Committee will know, is a consistent theme of mine. It is important that we sort out what is happening with SUDS. They can achieve a great deal in developing our water management strategies, but there is a definite lack of clarity on installation mechanisms and maintenance costs. Ministers must come back to us at stage 2 with their proposals for sorting that out. I hope that that is one of many recommendations from the Transport and the Environment Committee and the Finance Committee that will be taken on board and which will, ultimately, give us a very good bill.
On the subject of flooding, 39 years ago I bought a house in Kilbarchan and was warned by friends of friends that the area would flood. Being young, foolish and optimistic, I bought the house anyway, and it flooded twice. That was partly because, some years before, a nearby area, known as Bog park for obvious reasons, had been infilled to create a football park. Because of that, the area was deprived of what we might loosely call a small flood plain. That problem has since been cured at enormous cost to the local authority by hard flood defences. Intrinsic throughout today's discussion is the debate between hard and soft flood defences and the preference for the latter.
I want to speak about wetland: flood plains, salt marshes and peat lands. In the interests of agriculture, commerce or housing, many of those natural releases for high volumes of water have disappeared completely after being built on, constrained by dykes or infilled. There are good examples of natural riverine flood plains that relieve flooding and safeguard places, such as the Insh marshes on the Spey, which keep Aviemore safe from flooding.
The Forestry Commission's submission to the Transport and the Environment Committee, in annexe C on page 152, said:
"Woodland on wet ground can be extremely productive if a suitable range of species is used. If flood managers and forest managers work together, the development of floodplain woodland could be an economic land-use tolerant of (if not positively thriving on) periodic flooding. "
Scottish Environment LINK suggests that the restoration and recreation of wetlands could offer long-term solutions to both pollution and flooding and that wetlands throughout the river catchment areas should be included in the register of protected areas. It also suggests that wetlands should be included in the definition of the water environment and that specific recognition of their existence in the bill is necessary. The stage 1 report by the Transport and Environment Committee endorses the view of several witnesses that the bill
"should explicitly state the importance of wetlands"
in pollution and flood control.
I want to examine the aspect of consultation in the bill. We have all been part of consultation exercises and, sometimes, I have been a little cynical about them. I worry about section 11(9), which states that SEPA must "take into account" views expressed and representations made about the draft plan. That is fair enough, but "take into account" has the same feel as the old-fashioned interpretation of "consult"—in the end, SEPA will decide. There is no sign of a genuine dialogue with the public, drawing all the stakeholders in sub-basins into advisory groups. In short, the bill seems to take a strongly regulatory view and places most powers and responsibilities in the hands of SEPA or the minister.
The Tweed Forum, which deals on a small scale with environmental challenges, articulates the necessary spirit of co-operation. It gets right down to individual farms; it exchanges ideas and thereafter develops farm plans. Apart from the planned advantages of the schemes in environmental and water management, one of their selling features is the financial savings that might accrue to the farms. That offers the best recipe for securing genuine community participation and ownership of advisory groups. The forum proposes tangible environmental and long-term financial savings for people—either as land users or as rate payers and taxpayers—by good water management, and proposes that decisions should be reached after a genuine two-way exchange of opinions and ideas.
I do not believe that there is any desire not to consult, but the bill could promise more by way of negotiation, transparency and genuine participation.
The Water Environment and Water Services (Scotland) Bill was one of the first promises made at the start of our new Parliament. We should all welcome its commitment to sustainable water resources, to tackling pollution, to introducing greater consultation involvement and to putting the "polluter pays" principle into legislative effect. The commitment should be not only to punish polluters, but to acknowledge that the costs are borne by the rest of society and to provide an incentive to change behaviour in the future.
As Ross Finnie said in his opening remarks, in some parts of the world, people are managing scarce water resources. In the middle east, for example, water is a source of major conflict. For us, however, the past few years in Scotland have brought a challenge for which we have not been prepared. We have experienced different weather patterns and we know from Scottish Executive research on climate change scenarios that, particularly in the west of Scotland, we are facing wetter and windier weather. It is a big challenge because currently, we are aggravating our flooding problems and we are not even at the stage of beginning to minimise them. We must consider those problems for the future in the bill.
Many members have focused rightly on the cost and the difficulty in pinning down and quantifying costs. My constituency is flooded regularly and continuing with business as usual is too expensive for our communities. The Scottish Executive estimates that 170,000 homes are at risk of inland or coastal flooding. The current estimate of the annual average damage caused by river flooding is £20 million. It is predicted that the figure will double; the debate is about how fast it will double, but we know that it will double. If we break down those costs for individual communities, householders and businesses, we can see that the human costs are phenomenal. In thousands of homes throughout Scotland, people are seriously worried every time there is a flood warning because they do not know what will happen to them.
In my constituency, we know that the Water of Leith is prone to flooding. Some of my constituents have been out of their homes for nine or 12 months, which is a horrendous experience that no one should go through.
In the past few years, we have focused on remedial measures—the response to flood instances that are already stored up. Edinburgh alone will spend something like £24 million during the next three years. Our challenge is to move from the response to floods to flood prevention. To date, people have been concentrating on the downstream impact of flooding and there has not been enough focus on the upstream causes of flooding. The bill gives us an opportunity to set that straight.
The bill is already a huge advance in the legislative protection of our environment. I ask the ministers to take a long, hard look at flooding and to think about incorporating it in the bill. That is an issue that I raised at the European Committee, whose report to the Transport and the Environment Committee stated that we did not think that the water framework directive was sufficiently clear.
My understanding is that the European Commission, under the leadership of the Danish presidency, is now considering strengthening the water framework directive in the light of this year's devastating floods across Europe. I also understand that flood protection will be included in the common chapter of the water framework directive guidance that requires implementation by member states.
We also need a tougher approach by the land use planning system. We are still making the situation worse and we need the expertise. It is time that we applied the precautionary principle, and that must be done across Scotland. The bill should set the framework for a coherent overview on flood prevention and management. I do not care whether it is SEPA or the local authorities that produce a national flood approach, but somebody has got to do it. I have every confidence that the Executive can make it work. We need to pull in the land use development plans and an integrated river basin management approach, and we must ensure that that works.
George Reid and I recently went on an all-party visit to Prague and other parts of the Czech Republic. Prague was the highlight of coverage of the floods, but when we visited places such as southern Bohemia, one of the most prosperous regions of the Czech Republic, we saw how those areas have been devastated. They do not have the millions of pounds needed to put right the causes of flooding.
Flooding is a long-term issue that we must tackle. The bill gives us the chance to think in a visionary way and to tackle the problem. Scarcely a week goes by without one of our roads or railways being washed away. We cannot wait until somebody has perfected some kind of financial model to cost the solution to those problems. The costs are here now, and the bill gives us the opportunity to start to change things for the future.
I declare an interest as the owner of some farmland in the south-west of Scotland, most of which could currently be classified as very wetland.
It has become quite clear in this debate that there is certainly a consensus that the EU's water framework directive must be implemented, that the Executive has chosen to do so via the bill and that, on that matter at least, the Executive has no choice. That the EU has allowed a degree of flexibility in how the directive is implemented is also to be welcomed, so that localised conditions can be taken fully into account as the directive is transposed into Scottish law.
However, in my research for today's debate, and despite the minister's earlier assurances, it has become equally clear that there are several issues over which there are very large question marks. Not the least of those concerns the financial costs and benefits of the bill. I learned with interest that the Executive-commissioned report puts the costs at between £141 million and £324 million. That is an enormous range and one that sends shudders up my spine when I recall that the original estimate for the Scottish Parliament building was between £10 million and £40 million. Similarly, the financial benefits assessment is clouded in uncertainty. Although I accept that a certain number of the estimates can be only subjective at this stage, a great deal more objectivity will need to be brought to the fore if current uncertainties are to be addressed, as they must be if the bill is to progress satisfactorily.
A further uncertainty seems to lie in the direction and degree of consultation that took place prior to the publication of the bill, as no draft bill was issued. That may be the reason why the National Farmers Union of Scotland did not feel it necessary to give evidence to the committee at stage 1. That is a decision that I feel might well be reversed if and when the true financial and practical consequences of the directive for the agriculture industry are fully out in the open.
Even the implications as they are currently known give me cause for considerable concern. In a letter last month to the convener of the Transport and the Environment Committee, the Deputy Minister for Environment and Rural Development stated that farms employing best practice will face medium-term capital investment of £12 million to £18 million and long-term recurring costs of some £12 million per annum. Other farms will require long-term recurring costs of a further £12 million per annum, placing a long-term annual recurring cost of £24 million on an industry that the minister well knows is not exactly ideally placed to take on extra costs.
Furthermore, the river basin management plans are bound to look seriously at providing flood relief for areas that are currently liable to flood by creating flood relief areas higher up, on land that currently does not flood. The creation of more wetlands might be greatly welcomed by some lobbies, but it would be grossly unfair to impose those areas on inevitably higher valued—agriculturally rather than financially—and better-quality land on those upriver farms, without having a robust agri-environmental scheme to compensate for the loss of productive capacity. I do not suggest that that cannot or should not be done, but I strongly suggest that, before long, the whole issue will need much more thought.
I will add a note of caution in respect of SEPA's role as both policy maker and enforcer. The combination is not happy and there are already too many question marks over SEPA's ability to carry out its existing remit without our adding to it. Time does not allow me to develop that theme, but I will write to the minister shortly about the issue.
I cannot conclude without mentioning the vital importance of making progress on part 2 of the bill. Communities that I represent throughout the south of Scotland, such as Wigtown—which is Scotland's national book town—currently have a virtual moratorium on development placed on them by Scottish Water. If rural development is to mean anything, that problem must be addressed with the highest priority so that expanding communities can connect to water and sewerage services.
I have no desire to hinder or oppose the bill at stage 1, but I sincerely hope that some of those bones get more flesh on them in the coming weeks and months or the consensus that prevails in the chamber today may not be so obvious at stage 3.
I welcome the bill, which is necessary. Members have mentioned that the bill stems from a European directive. The European Union is to be commended for its commitment to the environment. We are legally bound to implement the directive, but the status quo is not an option for us. The state of our environment, including our water environment, will impact more and more on our ability to sell our primary products—our whisky, beef and lamb and farmed fish—and on our tourism industry, especially environmental tourism.
The European directive gives us a framework within which to place legislation that best suits circumstances in Scotland—for example, in respect of water abstraction. As the minister said, the bill is an enabling bill and we should not expect too much detail in it. That said, there are perceptions that elements that are crucial to the water environment have been omitted and that, in part 2 of the bill, which concerns water services, there is a lack of clarity over future arrangements to support rural housing developments.
I am particularly concerned about anxieties that have been expressed by rural, Highland and island housing associations, such as the Orkney Housing Association, and communities such as Morven and Ardnamurchan. Their anxieties concern future funding for water and sewerage infrastructure for rented and low-cost housing in small communities. Such housing is crucial if small rural communities are to survive. Currently, in areas in which such infrastructure is inadequate or absent, Scottish Water will provide both capital and maintenance costs, as long as such costs are reasonable. The definition of reasonable is somewhat constricting—at the moment, there are situations in which SEPA will allow no more septic tanks in rural communities, but Scottish Water will not provide sewerage connections, so no new homes can be built.
We do not know what will happen in the future. How far will the new commercially minded Scottish Water be able to subsidise such costs? Will there be much-needed improvement in support? What about the need to provide infrastructure for house sites for individuals to build their own houses in rural areas? That is crucial if we are to encourage working families to stay in, move to or move back to remoter rural communities.
In evidence to the committee, the minister said that we need more transparent criteria in respect of connections in rural areas and it will be for the Parliament to decide those. I would welcome such a debate. The minister also said that he had not decided who would pay for rural connection. Has he reached a decision yet? If not, when does he expect to do so? I would also like the minister to confirm that funds will be available for water and sewerage infrastructure in areas that are prioritised in local housing strategies for rural areas.
Another area that I am concerned about is the insufficient recognition in the bill of the intimate connection between agriculture and forestry and the water environment—other members have raised that issue. I am speaking not only about abstraction and diffuse pollution from intensive farming—important though such issues undoubtedly are—but about the management and restoration of wetlands and about the protection of headwaters of rivers. Land management contracts must be put in place that will reward farmers and crofters in a far more meaningful way than the present rural stewardship schemes do.
I ask the minister to visit the wetlands at Loch Insh in Strathspey to see for himself what is possible. I would like the minister to consider most urgently how agri-environment schemes might be integrated with the regulations proposed in the bill so that, for example, wetlands and flood plains can be managed to enhance biodiversity and prevent flooding further downstream.
Finally, the minister is of course aware that the Transport and the Environment Committee has been investigating the environmental impact of aquaculture and has produced two reports on its findings and recommendations. The committee came to the conclusion that in order to better protect the marine environment there is an urgent need for planning powers over aquaculture to be transferred from the Crown Estate commissioners to the local authority and that a section to implement that transfer should be included in the bill. I believe that planning and environmental regulation go hand in hand. They are integral to the sustainable expansion of the extremely important aquaculture industry, which provides 6,000 jobs in rural areas of the Highlands and Islands. The minister said that he was not yet convinced of the need for such a transfer of powers to be included in the bill. I hope that the committee can persuade him and that he will consider the matter again.
The minister said in his statement that he was not inviting Parliament to sign a blank cheque in respect of the bill. Regardless of whether that is true in respect of the public sector and the public finance commitment, I believe that he is asking the private sector to sign a blank cheque in respect of the bill.
The impact of the bill will largely be on industries and businesses in rural Scotland. When one analyses the work that has been done by the WRc report, one sees that the estimated cost over 40 years, from this year, is £838 million. A previous estimate was higher than that. The breakdown of the figure shows that farming will face a price tag of £253 million—admittedly that is over 40 years. All the other businesses that are impacted to a major degree are in rural Scotland. There is a question that I would ask the minister if he was in the chamber—I am sorry, I see that he is in the chamber and that he is cupping his hand to his ear; as I have his rapt attention, I will ask him the question. We all support the aims of the bill. We know that it must be passed and we all recognise that it may lead to considerable benefits, but how are rural businesses going to pay such a huge price tag? It is not possible to estimate precisely what that price tag will be, although Mr Morgan said that from the evidence that we heard in consideration of the bill the price tag might be much more than £1 billion over 40 years. What contribution will the state make? I am thinking of the wording of the financial memorandum from Mr Kerr, which indicates that any increase in expenditure is payable out of the Scottish consolidated fund. If Mr Finnie is here with us and in the perhaps unlikely event that he is in the same position, what contribution will the Administration make?
I support the idea that, so far as the impact of agriculture is concerned, it makes sound sense that we should be looking to agri-environment schemes to alleviate the scourge of flooding to which many members have referred. I saw the result of flooding and the misery that it creates first hand when I visited constituents in Inverness whose homes had been ruined by floods. There is an obligation on the Executive to say to what extent, if at all, the state will help the businesses that will be hit very hard, notably those in the agriculture sector.
Fergus Ewing is asking the minister to what extent he advocates that the Executive should pay. To what extent does Mr Ewing advocate that the Executive should pay?
There is an obligation to contribute towards the extra costs if farmers and others are being asked to join together with the state in improving the environment. If Bristow Muldoon had been listening, he would know that I have already referred to one specific way in which that should be done: agri-environment schemes and the rural stewardship scheme. There has been a review of agri-environment schemes. I think that to spend money to deal with levees, flooding amelioration techniques and so on would be far better than some of the expenditure that we have seen on the agri-environment schemes, some of which the minister admitted to the Rural Development Committee may not have served much purpose.
I am also concerned about the possible impact on the whisky industry and the lack of clarity about that. The whisky industry has made it absolutely clear that there is no basis for asking it to pay for private water supplies. That is a nonsense, given the £2 billion a year that Scotland sends to London and does not get back.
Rural housing is essential. Section 26 is opaque. I welcome the statement that affordable rural housing will continue to receive support, if that was what the minister said. I hope that some of the £17 million that Scottish Water will save will be directed towards affordable social housing in rural Scotland.
For the reasons that Mr Morgan set out, we cannot support the financial memorandum, but I welcome the principles of the bill and hope that we will have an answer from the minister on whether he accepts that the state has an obligation to help with the costs.
I welcome the general principles of the bill and Labour members welcome the support that will be given to the means to implement those principles.
I want to touch on the useful contribution from my colleague from Edinburgh Central, Sarah Boyack. The issue of flood management and reduction will be one factor in judging the opportunities that the bill provides for river basin management. I unashamedly draw to the minister's attention the impact of flooding in July this year in my constituency of Strathkelvin and Bearsden. That flooding affected wide parts of my constituency, including Kirkintilloch, Lenzie, Bishopbriggs, Bearsden and parts of Milngavie. I know that my colleague Des McNulty has taken part in the debate.
East Dunbartonshire's experience during the events of 30 and 31 July should have been a wake-up call to us that the costs of not dealing with flood risk are unsustainable and cannot be left to local communities. The area was particularly badly affected by flash flooding—22 roads were impassable and there were 500 flooding reports, which involved a number of people who had to be decanted from their homes. Much of the flooding was a result of the combined drainage system being overwhelmed. Foul water and surface water combined and backed up in the system, which added to the problems.
There were strong indications that flooding occurred in parts of the constituency that had not previously been affected by flooding and had not been thought to be at risk. That underlines the substantial and legitimate concern that a number of members have raised about the impact of climate change and land use.
Some of the affected families, such as those in Angus Avenue in Bishopbriggs in my constituency, had their homes inundated for the second time in two years, with all the upset, distress and cost that that brought in its wake. Following the 2000 incident, Scottish Water's predecessor in the area, West of Scotland Water, undertook modelling work with the undertaking that the aim was to avoid a repetition by addressing capacity issues. It has been difficult for me as the constituency MSP and for the local authority to get clarity on where that work is placed in Scottish Water's capital programme.
There is no argument that the intensity of the rainfall on the night in July was exceptional and that some of the incidents were inevitable. No road drainage system would have dealt with the impact of such a sudden substantial inundation. Obvious deficiencies were also disclosed, especially in relation to achieving improved co-ordination of flood reduction and flood prevention measures. The people who faced those difficult circumstances were not helped by being passed from pillar to post when they wanted, deserved and were entitled to clear advice and proper explanation as to what was being done for them. Little, if any, assistance was given to residents who were affected by dirty water, which was not the approach that West of Scotland Water adopted. I would be grateful if ministers would inquire of Scottish Water what its proposals are for foul and dirty water.
Most important, the incidents indicated structural difficulties and a lack of clarity about who is responsible for different operational issues. There were problems with getting feedback on Scottish Water's actions and a lack of dialogue between stakeholders and Scottish Water was identified. I hope that the advisory bodies that the minister has outlined will give a strong steer that such incidents should not be repeated.
We need an integrated approach to flood problems and the causes of flooding. I do not have time to address the issues of land use policy and capping, but I invite the minister to make a statement, in due course, on how he sees his responsibilities for agriculture affecting the important issues of land use and land management.
I record my strong support for what was said by Colin Campbell, John Scott, Sarah Boyack and Alex Fergusson, and I share the concerns that have been raised regarding the three Fs—flooding, forestry and farming. I have two observations to make.
First, the Executive divisions that deal with flooding are those concerned with planning, engineering and water. Other divisions that could be interested are those concerned with transport, roads and rail. In addition, the 32 local authorities deal with flooding. Therefore, what we have at the moment is a fragmented approach where flooding is concerned—organised fragmentation. Crime is still crime, whether it is organised or not; fragmentation is still fragmentation, whether it is organised or not. A single body—whether SEPA or a specially constructed body—must supervise flood management nationally and ensure that the necessary steps are taken at all levels.
Secondly, we must take an environmental approach. If we get the environmental approach right, almost everything else will follow: that is the beauty of environmental approaches. We are in danger of underestimating the huge contribution that can be made by farming and forestry, which Fergus Ewing mentioned. Measures would include contour ploughing, planting mixed deciduous forests, reducing the number of sheep on hills in flood-sensitive areas, reintroducing river margins and water meadows and using a managed retreat system to reintroduce estuary and wetlands. Such measures would not only make a contribution to flood control, but would have huge environmental benefits for the future.
I hope that the minister will take cognisance of those two observations and ensure that they are incorporated in the bill.
We move to wind-up speeches. As the financial resolution to the bill will be opposed, I must keep three minutes in hand for that debate. I therefore ask members to trim their speeches a little, if possible.
There has been widespread support in the chamber for the general principles of the bill. As Bristow Muldoon, the convener of the Transport and the Environment Committee, stated, every organisation supports its introduction. Nonetheless, several genuine concerns have been raised in the debate.
Concern has been expressed regarding the financial cost of the bill and who will carry the burden of that cost. That has been a recurring theme in members' speeches. Who could resist Sarah Boyack's call to use the opportunity that is presented in the bill to tackle the cause of flooding rather than treat the symptoms? We all agree with those sentiments. Another issue that has been raised is the need to transfer the planning powers from the Crown Estate to the local authorities, as Maureen Macmillan said. Concern has also been expressed about the impact that the bill may have in rural areas. The Scottish Federation of Housing Associations voiced concern over the likely impact of the withdrawal of support for first-time connections to sewerage and water.
The issue that has gained most prominence in the debate is the bill's financial impact. The Finance Committee's report on the financial memorandum states:
"The Committee was struck by the complete lack of clarity in relation to the financial implications … attached to the implementation of this Bill".
That is a damning statement. The minister has tried to provide further information and clarity on the matter, but there are clearly some genuine concerns that need to be addressed before the bill can move to stage 2.
Several members have spoken of the impact that the bill may have on the agricultural community, which will be expected to carry a substantial part of the cost of its implementation. I issue a word of warning on the £250 million estimate. I have taken part in a campaign to try to ensure that Ettrick bay meets blue flag status. Literally hundreds of thousands of pounds have been spent by all the agricultural operators around that catchment area, but despite about £700,000 to £800,000 of investment we have not managed to crack the problem. That is an example of how the cost of trying to meet existing legislation proved to be much more than we originally estimated. I hope that that is not a precursor of what might come about from the passing of the bill.
As Fergus Ewing rightly said, we need clarity about the cost impact on the whisky industry, which is an important industry in my part of the world.
I have two more points to make before I wind up. I could not agree more with the Transport and the Environment Committee about the transfer of planning powers from the Crown Estate to local government. The committee asked for amendments to be lodged to allow that transfer to take place.
Lastly, I ask the minister in his summing up to restate that the Executive is committed to putting in place continued funding for rural areas for the building of social rented houses. I accept the minister's premise that a water connection cost of £1,500 per house is not a good use of public money. However, in rural areas the provision or not of that money often decides whether a building project goes ahead. I hope that the minister will give a commitment on funding to reassure all of us who represent rural constituencies.
The statement that rang true to those of us who are involved in the Finance Committee was Ross Finnie's comment about there being no blank cheque. However, the Finance Committee has had a series of extremely inadequate financial memoranda. They may be improving in detail, because we sent them back for more information. I appreciate that when people consider enabling legislation it is often difficult to get beyond the broad principles. However, because we have had such a change in what we do about water and the environment in Scotland since the inception of the Scottish Parliament, there must be more accurate predictions of costs.
Many members referred to the cost range that we heard today. It is interesting that the figure at the top end of the range is remarkably similar to what I suspect will be the final cost of the new Scottish Parliament building. It is also interesting that that building, too, is built on a wet area that has artesian wells and outfalls from medieval drains.
Members referred to several issues in the debate, such as flood plains and the fact that flood defences are vital. We must consider planning and prevention measures. George Lyon, Bruce Crawford and many other members mentioned that issue, which we must include in our consideration of the bill's development implications.
Other members mentioned the bill's cost to the agricultural sector at a time when in many parts it is almost on its knees. Recently, I conducted a survey of about 500 farms throughout Aberdeenshire. Within two weeks, 25 per cent responded and 92 per cent of those had no real optimism for the future. Fergus Ewing and others have echoed that message today. Such messages must go out clearly from the chamber.
John Scott talked about flexibility and the fact that one size does not fit all and others agreed with that point. An integrated approach is the way forward and I think that Robin Harper supported that view.
We have dealt with the issue of funding within limits and whether the benefits will outweigh the costs. I suspect that only time will tell. However, there is broad agreement that we must use affirmative procedure for subordinate legislation that deals with something as important as our water environment. Members have sent out that message clearly from the chamber today.
Many members of the Finance Committee agreed about the inadequacy of the bill's financial details, so there is no point in going into that issue. Colin Campbell gave us an interesting account of the experience of living in a bog, which lightened the debate somewhat.
Scottish Water expressed concern to the Finance Committee and the Transport and the Environment Committee that medium to long-term investment is not factored into its current budgetary plans and that
"coping will involve some of the costs—perhaps a large proportion of them—falling on customers and therefore on charges."
That is not a clever way to go forward.
The Executive did not consult local government when the bill was published, but the Finance Committee did. Local government was assured that new burdens would be covered by the Executive's normal approach. I ask the minister whether that means that, again, the council tax payer will pay.
Mention has been made of other sectors that will be dramatically affected, such as fish processing. In the first members' business debate after Her Majesty the Queen opened this chamber, which dealt with fish processing, it was clear that there was a lack of understanding in the Executive about what the costs are, what can be done and what needs to be done. That also applies to agriculture, food and paper—not forgetting whisky, in relation to which we should declare an interest in that we are slight fans of that product. All those areas are big parts of the Scottish economy and particularly the rural economy. The consumers might have to pay more, but they are in the urban economy.
There has been talk of the gold plating of regulations. That is an old argument but, unfortunately, the lessons have not been taken on board properly by the Executive. As John Scott said, flexibility is vital.
Many people have said that SEPA cannot be the gamekeeper and the poacher and it is absolutely certain that we must find ways of dividing those roles.
We support the aims of the bill. The Executive has to deal with the directive, as that is part of being in Europe and we do not doubt that there are good things about the bill. Unfortunately, however, we are seeing policy implementation in a financial vacuum. The financial memorandum is, at best, weak and has no credibility. The Scottish Conservatives will not support it.
We are back on schedule as the SNP has informed me that it does not intend to speak on the financial resolution.
I am glad that, at the end of this debate, all parties are in agreement that the water framework directive is something that Scotland must sign up to, not only because we are part of the EU, but because it deals with the future of our water environment.
A stage 1 debate gives us a chance to raise issues about the principles of the bill and to ask questions that we want to be answered at stage 2. It is not only the SNP that has raised issues about the bill. Before the Transport and the Environment Committee could say that it was happy with the principles of the bill, it sought reassurances from the Scottish Executive on some main points, one of which was the financial memorandum, which I will return to later. Another point related to the cost-benefit analysis method. The minister has convinced me that the bill could bring great financial and social benefits but the tenor of the debate, especially with regard to the financial memorandum, tells us that he has not yet convinced all the members here or, more important, the stakeholders outwith Parliament on the method by which the cost-benefit analysis will be carried out.
The committee wanted a clearer understanding that, as this is primarily an enabling bill, the affirmative procedure will be used in relation to the statutory instruments that we are relying on to implement the bill. The minister has come a long way towards that and we look forward to him moving even further at stage 2. However, the committee's report asks not only for the affirmative procedure to be used in relation to the statutory instruments, but for financial memorandums to accompany them. That does not happen as a matter of course at the moment, but given the financial implications of the instruments associated with the bill, we want them to have financial memorandums.
On participation, I do not think that the minister has come as far as we would have liked him to. Colin Campbell talked about the fact that the notion of participation is mentioned slightly in the bill, but many of us want much more progress in that regard. Making sub-basin advisory groups statutory would go a long way towards reassuring us in that regard.
The Transport and the Environment Committee, the SNP and others are concerned about the use of derogations. As yet, we have heard no great detail on that issue. We asked for greater detail on the connection costs policy in part 2 of the bill and we have heard from more than one member today about the impact that those costs could have on small rural developments. The minister has said that he will consult, but telling us that he will consult more does not answer Maureen Macmillan's questions. We need to know the Government's policy on small and rural development connections.
Des McNulty—I hate to call him "Soapy Des"—raised SUDS earlier. The minister has not come far enough on that point. We need to know who is responsible for ensuring that we achieve sustainable urban drainage systems.
A couple of members picked up on my next point. We want to ensure that, when we pass the bill and implement the water framework directive, we have joined-up government. That is a horrible term and we all hate it, but we must consider it. We have heard about the effect that the bill and the directive will have on agriculture. That effect means that when the minister talks about strategies for agriculture and about agri-environment subsidies, he must consider everything in the round.
We heard from Colin Campbell about forestry and how it can help us. We heard about biodiversity. We look for better assurance from the minister that, when we implement the water framework directive, we consider not only its narrow implications—how it affects water—but its effect on all his Government's policies to ensure that we have sustainable, joined-up government. We know that the Executive talks about that, but we want it to happen.
I turn to the biggy that we have all addressed. Actually, there are two biggies: finances and flooding. I will consider finances. The Finance Committee and the Transport and the Environment Committee have criticised the financial memorandum. In fact, paragraph 107 of the Transport and the Environment Committee's stage 1 report makes it clear that
"the Committee is content to recommend to the Parliament that the general principles of the Bill are agreed to"
only
"On the basis that these issues",
including the financial memorandum,
"are addressed by the Executive".
I will quote from the letter that the minister sent to the committee on 25 October, which I presume to be in the public domain. On giving the committee a robust financial assessment, the minister said:
"We have done that to the fullest extent we can."
He went on to say that the report that WRc prepared, the financial memorandum and his letter of 27 September
"convey all the information that is available."
That is not enough for the Parliament to fulfil its duty of parliamentary scrutiny of the Executive and for members, not only of the Transport and the Environment Committee and the Finance Committee, to ensure that they have complied with their duty to scrutinise the financial memorandum. We are not satisfied with the minister's answers so far. We are not—and no member should be—able to vote for the financial memorandum.
I am sorry that, with only 30 seconds left, I cannot turn to the other biggy—flooding. The Transport and the Environment Committee and the Parliament will be left with a huge task at stage 2 and in future consideration of the statutory instruments that will enact the bill's provisions. To achieve a sound and sustainable water environment for Scotland, we are dependent on the Executive answering the financial questions that continue to be asked.
If that is consensus, I would not like to see us when we disagree.
To respond to every point that members have raised would take me the best part of two hours. [Members: "No."] Fortunately, I do not intend to do that. This is a stage 1 debate; we will have the opportunity to go into greater detail at stage 2.
Will the minister give way?
Not at the minute. I have more serious things to deal with.
As everyone realises, the bill is a vital piece of environmental legislation, so I am all the more surprised that the Scottish National Party seeks to jeopardise it by speaking against the financial resolution.
As Bruce Crawford graciously accepted—although I cannot say the same for his colleagues Fergus Ewing and Alasdair Morgan—the bill represents our chance to move ahead of the rest of Europe in timely implementation of the water framework directive. That is not just an abstract commitment to be fulfilled; it is an opportunity to make a substantial difference to Scotland's water environment. It is simply not true to say that the costs that arise from our implementation of the directive come ahead of those in the rest of Europe. There will be no gold plating.
Would the minister care to reconcile his statement that our costs will not be ahead of those in the rest of Europe with Mr Finnie's statement that the bill provides us with an opportunity to get ahead of the rest of Europe? How are those two statements compatible?
All businesses that gave evidence on the bill supported the phased approach. All Europe is required to have new methods in effect by 2012. There is no difference between us and the rest of Europe in the programme for effective implementation of the directive. It is spurious to argue that our competitiveness will be adversely affected.
The bill will give us a number of new powers to protect the water environment.
One of the themes that has come through clearly in a number of today's speeches—and which also came through in the Transport and the Environment Committee's report—is the opportunity that the bill could give us to tackle flooding. How does the minister believe that the new powers will enable the Executive to tackle flood management in the future?
That gives me the opportunity to address some of the important points raised by George Lyon, Sarah Boyack and Brian Fitzpatrick. We favour a national approach. We propose a national river basin district to give a national overview, with advisory groups covering large regional river basins across the country to ensure local input. We believe, as I think everybody does, that local authorities—which have local knowledge and are elected by local people—are best placed to take decisions on where flood defences are required, but that does not mean to say that we should not have a national strategy.
In its report on the financial memorandum, the Finance Committee sought
"a commitment from the Executive that additional costs resulting from the Bill on local authorities will be met in full, taking account of any cost savings that may be identified."
Will the Executive give that commitment today?
I can tell Bruce Crawford—and we will debate this at stage 2—that flood defence schemes are approved and funded by ministers on a national basis to national design standards. All schemes are required to take account of impacts upstream and downstream, and river basin planning will provide a useful additional forum for flooding to be considered at a strategic, national, level. That is not in itself an imperative of the directive, but I hope that Bruce Crawford appreciates the good reasons why flood protection measures ought to be integrated into river basin management plans instead of being dealt with through a separate planning procedure.
The bill will give SEPA more flexibility to regulate the environment, in particular in the important area of fish farming, which everybody knows is a subject close to my heart. SEPA will be able to focus on the processes of fish farming, rather than exclusively on discharges.
The powers under the bill are wide ranging, but the crucial point is that the planning system suggested in the bill will engage all interested parties in the drawing up of environmental objectives and in establishing the best means by which those can be achieved. The bill ensures that economic, social and wider environmental goals cannot simply be ignored when those plans are drawn up—and SEPA will give proper consideration to those factors when drawing up plans. It has embraced the new responsibilities already. We have given it sufficient funding to do so. It has already made great strides in readying itself for the task.
The flexibilities contained in the bill that allow derogation from higher environmental objectives for those bodies that are designated as heavily modified or artificial are an important safeguard, as Fiona McLeod was correct to recognise. We recognise the many social and environmental benefits that we receive from those types of water body. I offer the member the reassurance that she seeks: the bill will not simply discount those benefits.
Environmentalists recognise the objectives that the bill sets as a step forward. The bill moves us away from simple targets for the chemical status of water, towards a more holistic measurement of water status. That involves an examination of the ecological and chemical status of surface waters, and of the quantitative and chemical status of groundwaters. The change will mean that the regulatory regimes will be geared to tackle those factors that impact on the elements of the water environment that concern us most—the fish, plant and other life of our rivers, lochs and coastal waters. The bill represents nothing less than a fundamental overhaul of the way in which we protect our water environment in Scotland.
I welcome the Transport and the Environment Committee's endorsement of the provisions of part 2 of the bill. The bill is ambitious, and I am pleased that members have taken the opportunity to debate it thoroughly.
I do not have time today to respond directly to all the points that have been made. I give Des McNulty the assurance that he seeks—we have got the message. The Transport and the Environment Committee and the Finance Committee paid particular attention to the likely costs of implementing the bill. That attention has been reflected in today's debate. As Ross Finnie made clear in his letter to the committee, the bill is unusual in that it is largely an enabling bill. It also establishes a system of management and planning for the water environment that will determine the objectives that are to be set for each waterway and the measures that are necessary to achieve those objectives.
Given those two factors, it is impossible to be absolutely certain of the cost of implementation. Nevertheless, I am confident that we have provided assessments of costs that are as robust as possible. The estimated costs include assessments of the anticipated costs of secondary legislation that is to be made under the bill. Thirteen business-case assessments have been produced and dialogue has been maintained with sectors that are concerned about additional costs. In those discussions, we have sought to reassure business that, when decisions are taken on the balance between social, economic and environmental objectives, those decisions will be the right ones for Scotland.
I can do nothing better than echo the words of Nora Radcliffe and of Scottish Environment LINK on this issue. Scottish Environment LINK states:
"It is essential to see the costs issue in perspective. First, Scotland is obliged to ensure healthy waters for Scotland. Second, if the Bill is poorly implemented then the costs will be very much greater, not just to the taxpayer, but to public health, industry and the economy generally. Even without the Water Framework Directive driving this legislation, such a Bill is well overdue"—
I would argue—
"because it will SAVE the country millions in the long run.
Rather than just asking how much is this bill going to cost - the question should be how much it will cost if"—
as the nationalists propose today—
"it is unsuccessful, and how much it will save if it succeeds."
I thought that only the Tories knew the cost of everything and the value of nothing. However, it seems that today they have been joined by the nationalists.
We have the opportunity to move ahead of our European counterparts by passing the Water Environment and Water Services (Scotland) Bill. More important, we have the opportunity to demonstrate to the Scottish people—remember them—that we are responsive to their concerns and serious about the protection of the Scottish environment. The Scottish people will pass judgment on Bruce Crawford very soon. I hope that the Parliament will agree with me today and support both the motion and the financial resolution.