Section 31 — Approval of charges schemes

Water Industry (Scotland) Bill: Stage 3 – in the Scottish Parliament at 10:45 am on 14th February 2002.

Alert me about debates like this

Photo of Fiona McLeod Fiona McLeod Scottish National Party

In speaking to amendments 87, 88 and 89, I bring to the— [Interruption.]

Photo of Murray Tosh Murray Tosh Conservative

Order. There is a lot of chatter around the chamber.

Photo of Fiona McLeod Fiona McLeod Scottish National Party

Thank you, Presiding Officer.

Amendments 87, 88 and 89 are relevant to the charges schemes that customers will have to pay. My intention is to ensure that customers have a voice and that their views are considered in developing charges schemes. Charges will be of fundamental concern to each customer of Scottish Water.

On amendment 87, it is important that the water industry commissioner consults the water customer consultation panels when he draws up charges schemes. If the commissioner is to be the customers' champion, as we hope he will be, he must surely take on board customers' views on charges, as charging is one of the most fundamental activities that Scottish Water will undertake for each of its customers. Even if the water industry commissioner is simply to be an economic regulator—I say that because, when the committee took evidence at stage 1, and again during stage 2, the ministers referred to the water industry commissioner as an "economic regulator"—he should take on board customers' concerns, as the deputy minister conceded during stage 2. The water industry commissioner is to be the customers' champion and is to be concerned with customers' interests, so it is important that the commissioner takes cognisance, through the water customer consultation panels, of customers' views, because it is a fundamental fact that charges will affect them economically. If the water industry commissioner had to seek approval for charges through the customer consultation panels, that would strengthen his advice.

Amendment 88 is about publication of the charges schemes. It should be an absolute given that every customer has access to the full contents of a charges scheme, not just to an amended or an abbreviated version. If the full scheme is not published, customers will ask why they cannot be informed about a scheme for which they must pay. They will wonder what the minister, the water industry commissioner or Scottish Water is trying to hide from them.

Amendment 89 relates to section 32, on the commissioner's advice on charges. When advising on charges, the commissioner must take into account everything except the views of the customers. That seems wrong-headed and top-down rather than bottom-up.

Amendments 99 and 100 are about informing Parliament and involving it in the process of achieving a charges scheme. I hope that no parliamentarian would not want to be involved in that process.

I move amendment 87.

Photo of Dennis Canavan Dennis Canavan Independent

Under amendment 99, parliamentary approval would be required for any increase in water charges that was above the rate of inflation.

There is widespread concern about the escalation of water charges since water was removed from local authority control and the quangos took over. In my area, for example, water was owned and controlled by Central Regional Council until 1995-96. We had the lowest water charges in the whole of western Europe and the council had a progressive, forward-looking investment programme for capital projects.

Since the East of Scotland Water quango took over, there has been an increase in band D water charges of more than 170 per cent, which is well above the rate of inflation for the period in question. In the year 1998-99 alone, the increase was 40 per cent—more than 26 times the rate of inflation for that period.

Similarly, in Tayside region there has been an increase of 123 per cent since the North of Scotland Water Authority quango took over from Tayside Regional Council. Between 2000 and 2001, the increase was 45 per cent, which was 25 times the rate of inflation for that period.

Such increases have placed huge—and, in some cases, intolerable—burdens on consumers. The quangos and the Executive claim that such excessive increases are necessary to fund the capital investment projects that are required. The public find that difficult to accept. Who do they complain to? They complain to members of the Scottish Parliament, as their elected representatives. Therefore, we should have the opportunity of monitoring increases and, if necessary, vetoing them, when they are above the rate of inflation.

Under amendment 99, it would be up to Scottish Water and the Scottish Executive to justify such increases to Parliament. Parliament would have the opportunity to approve or disapprove them. Such arrangements would make Scottish Water's charges schemes more accountable to the consumers through their elected representatives in the Parliament. The amendment would ensure a greater degree of parliamentary accountability and a fairer deal for the consumer.

I ask the Parliament to approve amendment 99.

Photo of John Scott John Scott Conservative

Amendment 100 is about accountability and transparency. It is designed to further strengthen the hand of the commissioner, who will play a vital role in the success or failure of Scottish Water. Although we all expect Scottish Water to be a success, it is important that the commissioner's advice on charging is heeded. If it is not taken account of, or is modified, that must not be done furtively or behind closed doors. The reason for ignoring or modifying the commissioner's advice must be the subject of parliamentary scrutiny. That is why I lodged amendment 100.

Photo of Murray Tosh Murray Tosh Conservative

In the interests of the timetable, I will go straight to the minister.

Photo of Ross Finnie Ross Finnie Liberal Democrat

The level of charges is a sensitive issue, about which we must be properly concerned. The amendments that we are discussing seek to alter the arrangements that are set out in the bill for preparing, approving and publishing the charges.

We must be careful about the sensitive balance between the customer—and the commissioner, who, after all, is charged with acting on behalf of the customer—and an industry that is trying to do a job under the control of the Parliament. Scottish Water will be accountable for providing the highest possible quality of water and the best quality service for sewerage disposal at the most competitive price in the interests of the Scottish public. That is a difficult balance to achieve.

The provision in amendments 87 and 89 for the involvement of the customer panels ignores what the water industry commissioner will do under the existing proposals. The panels will have the general function of representing local views. The commissioner's role is to take an objective view of the totality of customers in relation to charges schemes. I am convinced that provisions already exist for the panels' views on charges to be appropriately referred to and taken account of by the commissioner, because section 2(5) of the bill states that the commissioner must have regard to the panels' representations, reports and recommendations.

In relation to amendment 89 in particular, it is important to leave the role of approving charges schemes to the commissioner, who is the independent economic regulator—that is the correct phrase—with all the relevant expertise. It is appropriate that quality and standards priorities, environmental obligations, the panels' views and ministerial directions about quality objectives are all part of the consideration. The commissioner must take account of all those factors before reaching a decision.

Amendment 88 provides for the publication of a charges scheme by whomever approved it—the commissioner or the Scottish ministers. That provision is unnecessary—section 33 of the bill provides for a summary of the charges to be published by Scottish Water and for the full scheme to be made available.

Amendment 100 provides for the reasons for ministers' modification or rejection of the commissioner's advice to be laid before Parliament, which would be a backward step. Under section 32(7), all the relevant papers on a charges review—including ministerial correspondence—will be published. I am confident that full disclosure will enable a full understanding of the outcome. Fragmenting the publication process would not be a benefit.

Dennis Canavan raised the interesting notion that charges should stick to the level of inflation. Although that is superficially attractive, we must remind ourselves of our purpose in creating Scottish Water. On the advice of the water industry commissioner, it is clear that the only way that we can control charging and make Scottish Water more efficient and more responsible to its consumers is to create Scottish Water in the form that is set out in the bill.

Dennis Canavan might have a nostalgic view of his local authority, but the truth is that the Scottish water industry has had to spend £2 billion over the past three years and will need to spend £2 billion in the next three years. That needs to be paid for. That level of investment cannot be obtained without cost. The water industry commissioner has made it clear that a revenue cap is needed to drive down charges, which have risen over the past three or four years, but it is important to take a strategic view on that.

Photo of Ross Finnie Ross Finnie Liberal Democrat

No, I must close.

The Transport and the Environment Committee recognised that the industry's massive investment needs mean that, even with major efficiency improvements, further increases will be required. Legislating to make it impossible or difficult for Scottish Water to meet the necessary targets would be highly undesirable. Accordingly, I invite Parliament to reject all the amendments in the group.

Photo of Fiona McLeod Fiona McLeod Scottish National Party

I should inform members that my stage 2 amendments on the code of practice and customer involvement were similar to my amendments in this group. Those amendments were accepted by the minister and agreed to by the committee. It would be logical for members to accept my argument that the customer's voice should be heard before charges can be increased.

Given the recent unnecessary increases in charges from both East of Scotland Water and West of Scotland Water, we must support amendment 99.

Photo of Murray Tosh Murray Tosh Conservative

The question is, that amendment 87 be agreed to. Are we agreed?

Members:

No.

Division number 10

For: Adam, Brian, Aitken, Bill, Campbell, Colin, Canavan, Dennis, Crawford, Bruce, Cunningham, Roseanna, Davidson, Mr David, Douglas-Hamilton, Lord James, Elder, Dorothy-Grace, Ewing, Dr Winnie, Ewing, Fergus, Ewing, Mrs Margaret, Fabiani, Linda, Fergusson, Alex, Fraser, Murdo, Gibson, Mr Kenneth, Goldie, Miss Annabel, Hamilton, Mr Duncan, Harding, Mr Keith, Harper, Robin, Hyslop, Fiona, Ingram, Mr Adam, Johnstone, Alex, Lochhead, Richard, MacAskill, Mr Kenny, MacDonald, Ms Margo, Marwick, Tricia, Matheson, Michael, McGrigor, Mr Jamie, McIntosh, Mrs Lyndsay, McLeod, Fiona, McLetchie, David, Monteith, Mr Brian, Morgan, Alasdair, Mundell, David, Neil, Alex, Paterson, Mr Gil, Quinan, Mr Lloyd, Robison, Shona, Russell, Michael, Scanlon, Mary, Scott, John, Sheridan, Tommy, Stevenson, Stewart, Sturgeon, Nicola, Swinney, Mr John, Ullrich, Kay, Wallace, Ben, Welsh, Mr Andrew, Wilson, Andrew
Against: Alexander, Ms Wendy, Baillie, Jackie, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brown, Robert, Butler, Bill, Chisholm, Malcolm, Craigie, Cathie, Curran, Ms Margaret, Ferguson, Patricia, Finnie, Ross, Fitzpatrick, Brian, Gallie, Phil, Gillon, Karen, Godman, Trish, Gorrie, Donald, Grant, Rhoda, Gray, Iain, Henry, Hugh, Home Robertson, Mr John, Hughes, Janis, Jackson, Dr Sylvia, Jackson, Gordon, Jamieson, Cathy, Jamieson, Margaret, 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, McLeish, Henry, McMahon, Mr Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Munro, John Farquhar, Murray, Dr Elaine, Oldfather, Irene, Peacock, Peter, Peattie, Cathy, Radcliffe, Nora, Raffan, Mr Keith, Rumbles, Mr Mike, Scott, Tavish, Simpson, Dr Richard, Smith, Elaine, Smith, Iain, Stephen, Nicol, Stone, Mr Jamie, Thomson, Elaine, Wallace, Mr Jim, Watson, Mike, Whitefield, Karen, Wilson, Allan

Photo of Murray Tosh Murray Tosh Conservative

The result of the division is: For 50, Against 66, Abstentions 0.

Amendment 87 disagreed to.

Amendment 88 moved—[Fiona McLeod].

Photo of Murray Tosh Murray Tosh Conservative

The question is, that amendment 88 be agreed to. Are we agreed?

Members:

No.

Division number 11

For: Adam, Brian, Aitken, Bill, Campbell, Colin, Canavan, Dennis, Crawford, Bruce, Cunningham, Roseanna, Davidson, Mr David, Douglas-Hamilton, Lord James, Elder, Dorothy-Grace, Ewing, Dr Winnie, Ewing, Fergus, Ewing, Mrs Margaret, Fabiani, Linda, Fraser, Murdo, Gallie, Phil, Gibson, Mr Kenneth, Goldie, Miss Annabel, Hamilton, Mr Duncan, Harding, Mr Keith, Harper, Robin, Hyslop, Fiona, Ingram, Mr Adam, Johnstone, Alex, Lochhead, Richard, MacAskill, Mr Kenny, MacDonald, Ms Margo, Marwick, Tricia, Matheson, Michael, McGrigor, Mr Jamie, McIntosh, Mrs Lyndsay, McLeod, Fiona, McLetchie, David, Monteith, Mr Brian, Morgan, Alasdair, Mundell, David, Paterson, Mr Gil, Quinan, Mr Lloyd, Robison, Shona, Russell, Michael, Scanlon, Mary, Scott, John, Sheridan, Tommy, Stevenson, Stewart, Sturgeon, Nicola, Swinney, Mr John, Ullrich, Kay, Wallace, Ben, Welsh, Mr Andrew
Against: Alexander, Ms Wendy, Baillie, Jackie, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brown, Robert, Butler, Bill, Chisholm, Malcolm, Craigie, Cathie, Curran, Ms Margaret, Ferguson, Patricia, Finnie, Ross, Fitzpatrick, Brian, Gillon, Karen, Godman, Trish, Gorrie, Donald, Grant, Rhoda, Gray, Iain, Henry, Hugh, Home Robertson, Mr John, Hughes, Janis, Jackson, Dr Sylvia, Jackson, Gordon, Jamieson, Cathy, Jamieson, Margaret, 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, McLeish, Henry, McMahon, Mr Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Munro, John Farquhar, Murray, Dr Elaine, Oldfather, Irene, Peacock, Peter, Peattie, Cathy, Radcliffe, Nora, Raffan, Mr Keith, Rumbles, Mr Mike, Scott, Tavish, Simpson, Dr Richard, Smith, Elaine, Smith, Iain, Stephen, Nicol, Stone, Mr Jamie, Thomson, Elaine, Wallace, Mr Jim, Watson, Mike, Whitefield, Karen, Wilson, Allan

Photo of Murray Tosh Murray Tosh Conservative

The result of the division is: For 48, Against 65, Abstentions 0.

Amendment 88 disagreed to.

Amendment 99 moved—[Dennis Canavan].

Photo of Murray Tosh Murray Tosh Conservative

The question is, that amendment 99 be agreed to. Are we agreed?

Members:

No.

Division number 12

For: Adam, Brian, Campbell, Colin, Canavan, Dennis, Crawford, Bruce, Cunningham, Roseanna, Elder, Dorothy-Grace, Ewing, Dr Winnie, Ewing, Fergus, Ewing, Mrs Margaret, Fabiani, Linda, Gibson, Mr Kenneth, Hamilton, Mr Duncan, Hyslop, Fiona, Ingram, Mr Adam, Lochhead, Richard, MacAskill, Mr Kenny, MacDonald, Ms Margo, Marwick, Tricia, Matheson, Michael, McLeod, Fiona, Morgan, Alasdair, Neil, Alex, Paterson, Mr Gil, Quinan, Mr Lloyd, Robison, Shona, Russell, Michael, Sheridan, Tommy, Stevenson, Stewart, Sturgeon, Nicola, Swinney, Mr John, Ullrich, Kay, Welsh, Mr Andrew, Wilson, Andrew
Against: Aitken, Bill, Alexander, Ms Wendy, Baillie, Jackie, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brown, Robert, Butler, Bill, Chisholm, Malcolm, Craigie, Cathie, Curran, Ms Margaret, 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, Harding, Mr Keith, 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, McGrigor, Mr Jamie, McIntosh, Mrs Lyndsay, McLeish, Henry, McLetchie, David, McMahon, Mr Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Monteith, Mr Brian, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Mundell, David, Munro, John Farquhar, Murray, Dr Elaine, Oldfather, Irene, Peacock, Peter, Peattie, Cathy, Radcliffe, Nora, Raffan, Mr Keith, Rumbles, Mr Mike, Scanlon, Mary, Scott, John, Scott, Tavish, Simpson, Dr Richard, Smith, Elaine, Smith, Iain, Stephen, Nicol, Stone, Mr Jamie, Thomson, Elaine, Wallace, Ben, Wallace, Mr Jim, Watson, Mike, Whitefield, Karen, Wilson, Allan

Photo of Murray Tosh Murray Tosh Conservative

The result of the division is: For 33, Against 82, Abstentions 0.

Amendment 99 disagreed to.