Section 1 — Water Industry Commissioner for Scotland

Water Industry (Scotland) Bill: Stage 3 – in the Scottish Parliament at 9:31 am on 14th February 2002.

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Photo of George Reid George Reid Scottish National Party 9:31 am, 14th February 2002

We come to the first group of amendments to the Water Industry (Scotland) Bill. Amendment 2, in the name of the Minister for Environment and Rural Development, is grouped with amendments 3 to 8.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I apologise for the large number of Executive amendments. Those who have served on the Transport and the Environment Committee and members who have been following the proceedings on the bill with interest will recognise that, although the objectives of the bill are relatively simple, its progress has been a complex operation. I apologise for the fact that several technical amendments have been required. The majority of them are, however, of a minor, tidying-up nature and will not, I hope, cause Parliament much difficulty. The remainder have been lodged following constructive discussions that Allan Wilson and I have had with the Transport and the Environment Committee and I hope that those amendments will improve the bill.

The dual function—to which I shall allude later—of creating the legislative framework to bring the water companies together and managing the preliminary stages subject to the bill on the ground has put enormous pressure on the committee and its members. At the outset, I acknowledge the contribution of committee members to the process and our appreciation of the speedy and efficient manner in which they have worked.

Amendments 2 to 7 fall into the category of tidying-up amendments. The bill distinguishes between Scottish Water's core and non-core functions. The core functions are those involved in providing water and sewerage services on the public networks. The non-core functions are activities such as providing laboratory or consultancy services on a commercial basis to third parties. Provision of those services is a matter for Scottish Water and those with whom it contracts to provide the services. It would not make sense for the water industry commissioner to have any role in that relationship. This group of Executive amendments clarifies that the commissioner's functions relate solely to the core functions of Scottish Water.

The Executive lodged amendment 8 following the commitment that Allan Wilson gave to John Scott during stage 2 consideration of the bill. John Scott moved an amendment requiring the water industry commissioner to respond to the recommendations and representations from the new water customer consultation panels within a given period. We recognise the value of placing some form of reporting duty on the commissioner, but we take the view that requiring him to respond in all cases within a fixed time scale would be too inflexible and impractical. In any event, the bill requires the water industry commissioner to have regard to—he cannot ignore—any matter that is put to him by the water customer consultation panels. Amendment 8 requires the commissioner to include in his annual report the actions that he has taken in response to representations, reports and recommendations from the panels. It also requires him to give his reasons in those cases in which he has decided that it is not appropriate to take action in response to any representation, report or recommendation.

The arrangements established by amendment 8 will ensure a transparent process for the commissioner's dealings with representations, reports and recommendations from the panels. I hope that that will help Parliament—which will be able to discuss those reports—to hold the commissioner to account for his actions in that respect. I urge members to support the Executive amendments.

I move amendment 2.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

I thank the Transport and the Environment Committee for the work that it has undertaken during the consideration of the bill. I am not a member of that committee any more, but I know that several important debates took place in committee and that some important changes to the bill and ministerial responses were made because of those discussions.

Amendments 2, 6 and 7 appear pretty innocuous. The minister attempted to display a disarming charm in speaking to the amendments—and he can be charming—but it is on such occasions that ministers are most worth watching. I am sorry to say to Ross Finnie that, on this occasion, we have not been disarmed. Those amendments will put the interests of customers at risk, as they effectively neuter some important powers that the water industry commissioner will have on behalf of customers. By restricting the water industry commissioner to issues that relate solely to the core functions of Scottish Water, the Executive will unnecessarily overexpose the interests of the customers. I shall explain what I mean by that.

If Scottish Water were to become involved in a joint venture with other organisations to deliver, for instance, bundled services of gas, electricity and telephony as well as water, the authority for that would lie outwith its core functions. If the Executive amendments were passed, the water industry commissioner would have no locus in such a venture on behalf of Scottish Water customers. The venture might involve bundled services, laboratory services—which the minister mentioned—billing activity or even a farming activity such as the one that, until recently, was taking place around Loch Katrine. All those activities could be outwith the core functions of Scottish Water and there would be no role for the water industry commissioner in them. Nevertheless, if any such joint ventures or special purpose vehicles went belly up or ran into debt, Scottish Water would be required to accept its share of liabilities.

Any losses incurred in those circumstances would impact on Scottish Water and would hurt customers, yet the water industry commissioner would be powerless to intervene. That cannot be right. There must be a role for the water industry commissioner in those circumstances to provide advice and guidance to Scottish Water. It would be wrong-headed to remove such powers from the WIC on behalf of customers; therefore, the Executive amendments are wrong-headed. I ask the minister to reconsider and I ask the Parliament to reject the Executive amendments if he does not.

Photo of John Scott John Scott Conservative

I agree with the minister about the hard work that has been involved in bringing the bill to stage 3. Although the work has been hard, I have enjoyed it—it has been good fun.

Unlike Bruce Crawford, we have no difficulty with amendment 2. We are also happy with amendments 3 to 7. I welcome the minister's comments on amendment 8 and thank him for honouring his commitment to lodge at stage 3 an amendment similar to my amendment 15 at stage 2. Amendment 8 will allow the commissioner to be more open about his decision-making process. In particular, it will force him to give reasons for inaction on representations. I am happy with amendment 8.

Photo of Fiona McLeod Fiona McLeod Scottish National Party

I will confine my remarks to amendments 3, 4 and 5. However, I will pick up on what the minister said about amendment 8, which we all agree is a good amendment. He said that amendment 8 will ensure that the customer, through the customer panels and the water industry commissioner, has his or her voice and views heard. I believe that amendments 3, 4 and 5 will restrict provisions that would ensure that those views are heard.

If the water customer consultation panels are to represent the views and interests of the customers, we cannot limit those views and interests to Scottish Water's core functions. The customer's interests in Scottish Water are bound up with the whole operation of the company; its overall performance could affect the delivery of its core functions. Therefore, the customer and the water customer consultation panels must be able to have their views heard on all matters that concern Scottish Water.

Bruce Crawford gave examples and I will give another, concrete example—MSPs in the west of Scotland might have received notice of the matter directly or through their constituents. West of Scotland Water has been sending letters out to customers in which it offers an insurance service, for £49 per annum, that will look after the pipes from a householder's gate to their doorway. As members will know, that service is the responsibility not of West of Scotland Water, but of the householder. The service is not a core function of West of Scotland Water, but its customers will have a view on, and an interest in, it. Through the water customer consultation panels, Scottish Water's customers should be able to have their views and interests represented on such matters.

Amendment 4 is about the issuing of reports from the water customer consultation panels. Again, customers will take to the panels issues that are outwith the core functions of Scottish Water. They will expect to see those issues appearing in reports.

Amendment 5 is about recommendations to the water industry commissioner, as a sort of promotion of customer interests. Again, customers will take non-core function interests to the panels. The panels must be able to present those interests to the water industry commissioner so that the customer's voice is truly heard.

Photo of Ross Finnie Ross Finnie Liberal Democrat

Two substantive issues are involved in this matter. First, the role of the water industry commissioner will not be to manage Scottish Water. We must be clear in our deliberations on the bill that there is a real distinction between the board of Scottish Water's role of managing and taking decisions and the commissioner's role of representing the customers' interests in strategic issues that concern the delivery of core functions. That is an important distinction.

Secondly, Fiona McLeod and Bruce Crawford spoke about the role of the commissioner if the board decides that Scottish Water should embark on other activities. The commissioner will not oversee the external, non-core functions of Scottish Water, but he will have a crucial interest in any contemplated or proposed activities. If he believes that such activities might damage or interfere with the balance of the core activities, he will have the right to be interested and play a role. That is an important point.

Photo of Fiona McLeod Fiona McLeod Scottish National Party

I refer the minister to section 2(4), which states that a customer panel must

"make such recommendations as it considers appropriate to the Commissioner".

The minister wants to limit that responsibility to apply only to core function items. How will the customer panels and the water industry commissioner take account of non-core functions if amendment 2 does not allow them to?

Photo of Ross Finnie Ross Finnie Liberal Democrat 9:45 am, 14th February 2002

The water industry commissioner will have no duty to investigate non-core functions. However, one should not interpret that to mean that the commissioner will have no right to complain about a proposal that might damage core functions. He will have such a right. The commissioner will have no right simply to raise issues that relate to non-core operations. If Scottish Water intends to embark on a non-core activity that will have a direct impact on the core function, the commissioner can complain about the potential for damage to the core function. However, as I said, the commissioner will have no right to comment on the particular operation of a non-core function. I would like to press amendment 2.

Photo of George Reid George Reid Scottish National Party

In that case, I will put the question. The question is, that amendment 2 be agreed to. Are we agreed?

Members:

No.

Photo of George Reid George Reid Scottish National Party

There will be a division. As this is the first division in a grouping, the voting time will be two minutes.

Division number 1

For: Aitken, Bill, Baillie, Jackie, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brown, Robert, Butler, Bill, Chisholm, Malcolm, Craigie, Cathie, Davidson, Mr David, Douglas-Hamilton, Lord James, Ferguson, Patricia, Finnie, Ross, Fitzpatrick, Brian, Fraser, Murdo, Gallie, Phil, Gillon, Karen, Godman, Trish, Goldie, Miss Annabel, Gorrie, Donald, Grant, Rhoda, Gray, Iain, Harper, Robin, Henry, Hugh, Home Robertson, Mr John, Hughes, Janis, Jackson, Dr Sylvia, Jackson, Gordon, Jamieson, Cathy, Jamieson, Margaret, Johnstone, Alex, Kerr, Mr Andy, Lamont, Johann, Livingstone, Marilyn, Lyon, George, Macdonald, Lewis, Macintosh, Mr Kenneth, MacKay, Angus, Maclean, Kate, Macmillan, Maureen, Martin, Paul, McAllion, Mr John, McAveety, Mr Frank, McCabe, Mr Tom, McIntosh, Mrs Lyndsay, McLeish, Henry, McMahon, Mr Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Murray, Dr Elaine, Oldfather, Irene, Peacock, Peter, Peattie, Cathy, Radcliffe, Nora, Scanlon, Mary, Scott, John, Scott, Tavish, Simpson, Dr Richard, Smith, Elaine, Smith, Iain, Stephen, Nicol, Stone, Mr Jamie, Thomson, Elaine, Tosh, Mr Murray, Wallace, Mr Jim, Watson, Mike, Whitefield, Karen, Wilson, Allan
Against: Campbell, Colin, Canavan, Dennis, Crawford, Bruce, Cunningham, Roseanna, Elder, Dorothy-Grace, Ewing, Mrs Margaret, Fabiani, Linda, Hamilton, Mr Duncan, Hyslop, Fiona, Ingram, Mr Adam, Lochhead, Richard, MacAskill, Mr Kenny, MacDonald, Ms Margo, Matheson, Michael, McLeod, Fiona, Morgan, Alasdair, Munro, John Farquhar, Neil, Alex, Paterson, Mr Gil, Quinan, Mr Lloyd, Robison, Shona, Sheridan, Tommy, Stevenson, Stewart, Sturgeon, Nicola, Ullrich, Kay, Welsh, Mr Andrew

Photo of George Reid George Reid Scottish National Party

The result of the division is: For 72, Against 26, Abstentions 0.

Amendment 2 agreed to.

Photo of George Reid George Reid Scottish National Party

I ask Mr Finnie to move amendments 3, 4, 5, 6, 7 and 8 en bloc.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

On a point of order, Presiding Officer. The SNP wants to oppose some of the amendments, but we want to support amendment 8.

Photo of George Reid George Reid Scottish National Party

I was coming to that. I was going to ask whether members would be content for a single question to be put on amendments 3 to 8 or whether they want each amendment to be voted on. However, from Mr Crawford's point of order I take it that putting a single question is opposed. Therefore, we will put the question on each amendment.