Date: 8 June 2006

Unions call for water regulator to be sacked

Unions representing staff in the Scottish water industry today called on Environment Minister Ross Finnie to sack the Chair of the Water Industry Commission, Sir Ian Byatt. This follows Sir Ian's announcement of a blueprint for the privatisation of Scottish Water.

The unions say he is trying to overturn decisions of the Scottish Parliament on the structure of Scottish Water; he is trying to force full privatisation on part of the industry by using his powers to set unfair conditions, and he is trying to privatise the rest on the quiet by setting up a shell mutual company.

UNISON Scottish Organiser, Dave Watson said: "We warned ministers at the time of the recent charge determination that Sir Ian was privately briefing in favour of privatisation and he has now gone public. It is not the function of the regulator to propose structural change to the water industry in Scotland. That is a matter for Ministers and the Scottish Parliament. We said then that Sir Ian's real objective was to undermine Scottish Water to make the case for his dogmatic ideological views."

"Only two weeks ago the WIC Chief Executive was saying to industry journal 'Utility Week' that he 'does not see it as his role to comment on whether or not Scottish water should be privatised'. Now he says the exact opposite! No one in the industry or the public can have any confidence in anything the WIC says."

Unions are concerned that Sir Ian's call for Scottish Water's new business-supply arm to be privatised is totally contrary to the assurances given to parliament when the Water Services Act was passed. It makes clear that the conditions the WIC is placing on the funding, structure and licensing arrangements for Scottish Water are designed to ensure that the supply business will be totally privatised.

Dave said: "This is the most underhand and disgraceful way any regulator can treat an organisation they have to regulate. They secretly decide on a new structure for the industry and then deliberately set conditions to force Ministers and Scottish Water to comply with that view."

Unions also reject the proposed not-for-profit or co-operative solution as completely misleading. This option was rejected when Scottish Water was established because it means that, in a capital intensive industry Scottish Water would in effect be owned by the banks, with token consumer representation. In addition, as at Welsh Water, the 'co-operative' would be a shell company with all services provided by private water companies. Customers would pay higher charges to finance higher borrowing costs and company profits.

Dave said: "Scottish Water, despite the best efforts of the WIC to hamstring it, is a great success story for the Scottish public sector model at a time when communities across the world are rejecting water privatisation. Huge savings in operating costs have resulted in some of the lowest charges in the UK whilst service standards and customer satisfaction ratings have improved, and cleaner water and beaches have been delivered.

"Indeed most of the difficulties facing Scottish Water are caused by Sir Ian importing his failed English model of short term cuts in investment leading to increased short and medium term pressure on vital assets."

ENDS

For Further Information Please Contact: Dave Watson (Scottish Organiser) 0845 355 0845 (w) 07958 122 409 (m) Chris Bartter (Communications Officer) 0845 355 0845(w) 0771 558 3729(m)

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