| The Deputy Minister
for Environment and Rural Development (Allan Wilson):
I add my concern to that which was expressed by Murdo Fraser over those
who face increased water bills this year. No one, least of all me, wants
costs to rise. However, at this point, I caution against Mr Fraser's proposal
that changing the whole system would necessarily benefit customers or consumers.
I will remind
members why Parliament decided in the previous session that public ownership
of the water industry in Scotland represented the best deal for customers
and explain why the changes to charges have been made. Scottish Water
has started down the path towards more efficient services, which will keep
down future charges for consumers. I say to Bruce Crawford that any change
in ownership now would simply detract from that progress and would be worse
for customers.
Our programme
for a better Scotland makes clear the Liberal Democrat and Labour commitment
to retain Scottish Water in public ownership. We must remember that Scottish
Water was created only just over a year ago at the Parliament's behest.
We knew then about all the problems in the water industry and we knew that
there was need for further investment. We knew that we needed to protect
public health and to improve water quality and customer services. Moreover,
we knew then-as we know now-about the need to deliver those services efficiently.
However, we knew that all those things could not be done overnight and
therefore we decided, correctly, that the best deal for the Scottish people
was to merge the three water authorities into one national public sector
organisation. That was true then and remains true now.
As Mr McNulty
has pointed out, the claim that prices in Scotland have risen at four times
the rate of those in England is wrong. It does not compare like with like.
A decade ago, there were no sewerage charges in Scotland as they formed
part of the general local authority charges. As a result, the Tories are
comparing payments for both water and sewerage with payments for water
alone.
Murdo Fraser:
Will
the minister confirm that Scottish domestic customers are paying on average
20 per cent per annum more than domestic customers in England and Wales?
Allan Wilson:
I
confirm that, as far as comparisons with England are concerned, it might
be true that we are tackling problems a bit later than they were tackled
in England; however, we are certainly tackling them
vigorously
now. I think that that is probably what Mr Fraser is complaining about.
We set up Scottish Water as a regulated public sector corporation to tackle
those problems and we intend to see the job through.
It is early
days to be judging the performance of Scottish Water. After all, its first
report has not even been laid before Parliament yet. However, I believe
that Scottish Water has already made a good start in its first year.
Operating costs
have been significantly reduced; customer services have been improved;
and the quality of both drinking water and the wider water environment
is better. Indeed, I can testify to that from the example of
Saltcoats in
my constituency. All that has happened at the same time as we have had
to merge the three former water authorities into one.
There is still
a long way to go. Although much has been done, there is much more still
to do.
Alasdair Morgan
(South of Scotland) (SNP): I am sorry to interrupt
the minister's self-congratulation. However, will he address one of the
major points of this debate, which is the disproportionate impact of the
new charging scales on small businesses? That situation has come about
mostly because of standing charges, which in some cases have led to bills
tripling or quadrupling.
Allan Wilson:
I
will address precisely that point.
As we all know,
the water infrastructure that Scottish Water inherited was not in great
condition and, rightly, there is considerable pressure to bring it up to
higher standards, which requires the massive investment programme that
we have embarked upon. During the four years from 2002 to 2006, we will
invest £1.8 billion in the industry, which, per capita, is more than
will be invested in England and Wales.
That investment
will improve drinking water quality and enhance bathing water and the natural
water environment, but it has to be paid for. It is being paid for partly
by the current charging regime, to which Alasdair Morgan referred, and
partly by increased Government borrowing. Claims that Scottish Water is
required to eliminateits borrowing by 2006 are wrong. The Executive is
providing huge financial support for the investment programme-we will lend
a further £250 million this year and almost as much for the next
two years.
Richard Lochhead
(North East Scotland) (SNP): rose-
Allan Wilson:
Let me develop my point, because it relates directly to the issue that
Alasdair Morgan raised.
No one-least
of all me-wants costs to increase, which is why Scottish Water has been
tasked with making significant efficiency savings, the fruits of which
will be seen in future, as they will lead to lower charges in the
longer term.
However, we also want the charges that people pay now to be fair and equitable,
which I think was the point that the honourable gentleman Alasdair Morgan
made. That desire underlies the charges scheme
that has been
agreed by Scottish Water and the water industry commissioner for Scotland
this year. The level of charges is based on two principles: charges should
be harmonised throughout Scotland and they should reflect the cost of the
provision of the service. People and businesses throughout Scotland should
pay the same for an equivalent service and the amount that is paid should
reflect the average cost of providing that service.
The water industry
has largely fixed costs, which is reflected in the charge increases.
Of course, members pick on the extreme examples of charge rises-I have
had 50 or so representations from members, including Alasdair Morgan, on
that subject-but, naturally, we do not hear from the 20,000 or so business
customers whose bills are lower than they were last year, or from the many
thousands more who had low percentage increases. Nor do members point out
the critical fact that those who face the 500 per cent increase to which
Murdo Fraser referred had bills of less than £60 last year, which
is on average less than the band A householder would pay. I sympathise
with those who face much larger bills this year, but we must remember that
those customers have in the past paid less than the full cost of the service
they have received, which means that other customers have had to pay more.
That is not fair and cannot be right.
A review of
ownership would create only uncertainty and would undermine the progress
that Scottish Water is making, which cannot be in the public interest.
We do not need more analysis; we need to allow Scottish Water to deliver
on its programme of efficiencies and capital investment. It should not
be deflected from that course, which is why I commend to the Parliament
the Executive amendment to Murdo Fraser's
motion.
I move amendment
S2M-162.3, to leave out from first "notes" to end and insert:
"believes that,
having established Scottish Water in 2002, this is the right means of delivering
cost-effective and improved services in accordance with the requirements
of the Parliament and that, in the short time since
Scottish Water's
establishment, it has started the process of delivering cost effective
and improved services, and further believes that a review of its ownership
and funding now would undermine that progress to the detriment of all customers."
To
read this debate in full, click here
|
