Water Services Bill MSP Briefing

On Wednesday 17 November 2004 Parliament will debate the Stage 1 report on the Water Services etc (Scotland) Bill. UNISON is the largest trade union in the Scottish water industry. UNISON welcomes many aspects of this Bill but has serious reservations over certain provisions.

Water Industry Commission

UNISON welcomes the replacement of the single regulator by a broader based Commission and agrees with the Environment Committee that five members are more appropriate. A strengthening of the Customer Consultation Panels is also welcome if it is properly resourced.

The narrow 'expert' led membership of the Commission would be appropriate if it was only concerned with economic factors. However, in a public service they have to take account of the public policy framework set by Ministers. As Ministers are proposing to hand the final appeal over to another economic London based quango there is a case for a wider membership base in the Commission.

Provision of Water and Sewerage Services

UNISON supports a statutory framework for competition and the Committee's report misunderstands the STUC evidence on this point. The statutory framework should in our view enshrine the exclusion of competition as provided for in Schedule 3 of the Competition Act - not the partial privatisation of Scotland's water.

UNISON welcomes the Committee's support for prohibiting common carriage and competition in the domestic sector. In evidence the water industry unions have highlighted the additional costs and negative impact on customers and the industry of non-household competition. In essence this competition and associated business separation is an unnecessary and costly distraction from Scottish Water's key objectives.

We welcome the Committee's position on the vital importance of accurately apportioning costs and agree with the criticisms of the financial memorandum and RIA. However, it would not be an issue if Parliament rejects this privatising measure in its entirety.

Licensing

The many licensing difficulties highlighted by the Committee would again disappear if non-household competition were prohibited. On the right of appeal to the Competition Commission, UNISON remains of the view that this is an abrogation of ministerial responsibility and a loss of democratic accountability. For Parliament to hand over the final decision on charges for a public service to a London based quango must be wrong in principle and in practice.

Conclusion

Many of the concerns expressed in the Stage 1 report highlight the essential problem with the structures proposed in the Bill. The Committee rightly reflects widespread concern over investment, charges, social inclusion, economic competitiveness and environmental sustainability. These are all vital public policy issues for Parliament. However, the Bill broadly seeks to establish a regulatory and licensing regime that applies to privatised utilities. The two approaches are simply incompatible. We should focus on providing a statutory framework for a fully public water industry.