| Allan Wilson:
In returning
to the environment portfolio from sport, the arts and culture, and in getting
to grips with the detail of the water industry in the past few days, I
have been struck by the amount of work that has been done by members of
the Transport and the Environment Committee, and by their warm endorsement
in the stage 1 report. That rightly reflects what I believe to be genuine
enthusiasm for the way in which the bill will serve Scottish customers—after
all, we are all here to serve the Scottish people.
I will come
to some individual issues shortly, but I will clearly have insufficient
time to deal with all the matters that have been raised in the debate.
It is worth putting on record again the purpose of the proposed legislation
and what we hope it will achieve. The case for Scottish Water can be summed
up in one word: efficiency. A single water authority will be able to achieve
greater efficiency savings than the existing three authorities could manage
on their own. For customers, that greater efficiency will mean lower charge
increases.
As Ross Finnie
said, the figures are dramatic. Tavish Scott reminded members and I remind
them now that, according to the water industry commissioner, without Scottish
Water the average Scottish water bill would rise by between 36 per cent
and 46 per cent over the next four years, depending on where in the country
one lives. With the establishment of Scottish Water, bills will rise by
only 20 per cent.
Alex Johnstone
sought to make comparisons with England and Wales. In so doing, he was
trying to extol the virtues of a privatised service, which we obviously
reject. Alex Johnstone got his facts wrong; the average Scottish charge
this year is £228.82, compared to the English and Welsh average of
£233. Even in that simple test, the contention that privatised service
is more efficient is, to be frank, wrong.
I wish to deal
also with a fantasy that has again been promoted by the SNP. That is the
fantasy that somehow Scottish customers were financially disadvantaged
compared to English customers at the time of the commutation of debt, to
which reference has been made. The water industry commissioner has shown
that Scottish customers did relatively well out of the £700 million
debt commutation for Scottish Water. As Ross Finnie explained, the benefit
to the customer of writing off the English-Welsh debt was £50 and
the benefit to the customer of the Scottish commutation was £300,
which is a six fold advantage.
Richard Lochhead:
When will the minister start standing up for Scotland's consumers, instead
of defending a decision that was made by the Tory Government several years
ago?
Allan Wilson:
I thought that I was standing up for Scotland's consumers, but perhaps
I missed something. Richard Lochhead's interventions are getting increasingly
obtuse.
Tommy Sheridan:
The minister heard my comments about progressively applied water tax. It
is my understanding that, under the Scotland Act 1998, we would be able
to apply such a tax because of the Parliament's responsibility for raising
water charges. Will the minister accept that that is at least worth investigating?
It would allow a more progressive charge to be levied throughout Scotland?
Allan Wilson:
I have not seen Tommy Sheridan's proposed amendment, although I did see
his press statement. I suspect that his reference to tax might be part
of the problem which, as Tavish Scott pointed out, might have made his
amendment ultra vires for the purposes of the debate. I agree with Tommy
Sheridan that we should have a genuine debate on affordability. Debt write-off
is part of that debate, but if by some miracle Gordon Brown gives us £2
billion tomorrow—in addition to the Scottish grant—the last thing that
I would wish to do with £1 billion of it would be to write off Scottish
Water debt. The principal beneficiaries of that would be corporate Scotland,
not the lowest-paid water consumers. I am with Tommy Sheridan 100 per cent
in seeking to do something for lower-paid water consumers.
Delivery of
efficiency savings means that we must achieve the same objectives for less
money. If that does not happen—if less is achieved or delivered—it is not
efficiency, but cost cutting. We have set before Scottish Water the outputs
that it must achieve, including improved drinking water quality and cleaner
beaches. We require it to achieve those objectives with less charge income
than the existing authorities would have had to do the same work.
Setting up Scottish
Water does not mean compromising public health or environment protection
standards. It means the opposite. It means that we must strengthen the
Scottish water industry to ensure that standards will rise dramatically
over the next four years, but at less cost to the customer than would otherwise
have been the case.
Andrew Wilson:
rose—
Allan Wilson:
May I move on? Andrew Wilson could perhaps come back in later.
Bristow Muldoon
and others mentioned charitable relief's. As Ross Finnie said, we acknowledge
the strength of feeling about charitable relief's, although we are mindful
that we must keep that in the context of the Executive's record funding
of the voluntary sector and its policy of targeting support for the sector
according to the outputs that it achieves. We will, however, consider the
suggestions that have been made. I understand why a continuation of the
current transitional relief scheme might be viewed as attractive, but I
do not share that view. It is important that charities are not left uncertain
about their position. We must be clear about how those that are affected
by this year's postponement, which was announced in May, plan to cope with
the phased withdrawal of relief's from next April.
Bruce Crawford:
The minister has come to the crux of the matters that we have been raising
all morning, which is the potential for the new organisation to move on
and to become a privatised body, if ministers wanted that.
Section 25(3)
says that Scottish Water will be able to
"form ... companies
(within the meaning of the Companies Act 1985".
In what circumstances
does the minister envisage that power being used?
Allan Wilson:
By definition, it takes—
Bruce Crawford:
In what circumstances?
Allan Wilson:
By definition—[Interruption.] I will return to that point, but perhaps
I could conclude first on charitable relief's, which are important to many
people. We recognise that some difficulties might remain for small local
charities that rely on public funding, which have been identified by the
Transport and the Environment Committee. I undertake to consider further
at stage 2 the scope for possible support for such organisations.
I come now to
a point that Bruce Crawford raised. I know that he has expressed concern
that the bill will result in back-door privatisation of Scottish Water,
or that it will allow Scottish Water to diversify into other areas at the
expense of its core functions and customers. I am happy to take this opportunity
to restate what we have said all along: Scottish Water will be created
by primary legislation and can be dissolved only by further primary legislation.
It is being given its core functions through primary legislation and only
further primary legislation can amend or remove those functions. There
are two safeguards: first, the Scottish Executive has no intention whatever
to privatise Scottish Water; secondly, such a move would require primary
legislation.
Bruce Crawford:
rose—
The Deputy Presiding
Officer: The minister is in his last minute.
Allan Wilson:
If I am in my last minute, I say simply that I hope that I have made my
response clear. I look forward to the SNP's stage 2 amendments on the matter.
I assume that those amendments will say that this proposed primary legislation
can be repealed only by further primary legislation that would replace
the original primary legislation. How the SNP intends to square that circle
I really do not know. I look forward to that with interest.
Concern has
been expressed about staffing and I share that concern. I am probably the
only person in the chamber who was around at the original restructuring
of the water industry in the 1970s. I represented water workers during
that process and I was also involved in restructuring in the 1990s. Here
we are again, restructuring the industry to take account of the competitive
environment in which it must operate for the next 100 years.
I do not underestimate
the challenge of the move to Scottish Water that faces all who work in
the industry, whose commitment will be crucial to the success of the venture.
Scottish Water will recognise that commitment in its dealings with staff.
The existing authorities have been running voluntary redundancy programmes
and I do not pretend that further redundancies are avoidable. However,
where they are necessary, they will be handled sympathetically and responsibly.
I have not,
in the time that is available to me, been able to address every point that
has been raised this morning. I will have the opportunity to return to
many of those points with individual members and with the committee during
stage 2.
I ask the Parliament
to approve the general principles of the Water Industry (Scotland) Bill,
in the knowledge that that will bring us closer to our aim of vesting Scottish
Water on 1 April 2002 for the benefit of all its customers.
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