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Column 664come to that if they are faced with a level of resistance which damages the ability of water boards and private sector agents to deliver the sewerage service.
Mr. Alex Salmond (Banff and Buchan) : I offer the hon. Gentleman a third option and that is to do what is becoming increasingly prevalent in England and Wales--self-disconnection through the introduction of water metering. That seems to be the road down which the Government are moving. In England and Wales, the Government are allowing people to disconnect their own water and sewerage service. That is why it is important to strengthen the provisions in the Bill so that self-disconnection will not be allowed in Scotland.
Madam Deputy Speaker (Dame Janet Fookes) : Before the hon. Member for Dundee, East (Mr. McAllion) pursues that point, I must point out that the terms of the Ways and Means motion are fairly narrow. Although passing reference may be made to other matters, this must not develop into a full- blown debate about disconnections.
Mr. McAllion : That is a fair point to make, Madam Deputy Speaker. I was talking about the reference to the Consolidated Fund in paragraph (b) and asking the Minister to clarify whether any shortfalls that may accrue from non-payment will be met by the Consolidated Fund or, as the hon. Member for Banff and Buchan (Mr. Salmond) has suggested, by the introduction of metering. Effectively, that would be the introduction of self-disconnections for Scottish domestic consumers.
Perhaps that is not a matter of grave concern to Tory Members because their constituents are already subjected to such deprivations, but it is a matter of concern for Labour Members because our constituents are protected by Scottish law at present. We want to ensure that that position remains and no move is made by the Government to change the law in that respect.
Mr. Maxton : I come back to the phrase "exercise of their functions" in paragraph (a), to which my hon. Friend referred. I wonder whether that covers the cost to local authorities of collecting water charges. Presumably the collector of the money will have to carry out any disconnections, not the water authority. Labour-controlled local authorities could be forced to disconnect people from their water supply, although they have no control over that supply at all.
Mr. McAllion : My hon. Friend makes a fair point. As I understand the motion and the substance of the Bill, collection of water rates will not be one of the functions of the water and sewerage authorities. That function is being allocated to the new single-tier councils, which will have nothing whatever to do with the provision of water and sewerage services.
My hon. Friend is absolutely right--there may well be a level of resistance to paying water rates to the new area boards. But that will not be a problem for area boards because the responsibility for collecting water rates will lie with local authorities. Local authorities will get the blame if they have to pursue non-payers through diligence and through the courts, the sheriff, warrants and so on.
One of the Government's great arguments about the measures contained in the Bill is that they make things clearer and more accountable. We cannot imagine another situation in which it is not clear where accountability lies other than the one referred to by my hon. Friend.
Column 665My final point relates to paragraph (c) :
"to authorise the payment into the National Loans Fund of any sums paid to the Secretary of State in repayment of loans made by him to any water and sewerage authority".
I should like the Minister to explain what those loans are likely to be. We know that, once the water companies in England and Wales were privatised, they quickly moved away from solely providing water and sewerage services and diversified into other areas of economic activity. They became involved in waste companies and leisure activities.
As my hon. Friends have said, there is a great danger that the land, rivers and lakes associated with water and sewerage authorities will be quickly divested by the new water boards and sold to private sector companies, which can then exploit them for profit by putting up fences and gates, denying access to the public, and increasing charges for fishing, walking and sailing on the lochs. That is a serious issue which the Minister must explain to the House before the resolution is passed.
The measure has met almost complete opposition from the people of Scotland. It will have a deleterious effect on the way in which people pay for their water and sewerage services. Indeed, costs will spiral upwards until they match those in England and Wales. Disconnections will occur and metering will be imposed on people against their will.
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : My hon. Friend has not mentioned the cost of collection. At the moment, collection is carried out by regional councils, whereas presumably under the new arrangements there will have to be a separate department to deal with the collection of those water and sewerage charges. That will mean that a separate finance department and separate arrangements wil be needed for collection and billing. Does my hon. Friend agree that that will mean a substantial increase in administrative costs?
Mr. McAllion : Very much so. We are not simply dealing with the taking away of water and sewerage services from regional councils where regional councils are left in place. Those regional councils have finance departments and have the means of collecting council tax at the moment. Another part of the Bill relates to the abolition of regional councils and the break-up of finance departments and of the systems for collecting taxes and water rates. Those systems will not be in place in 1995 or in 1996.
The water rates will have to be collected by the new local authorities, many of which may not be in a position even to collect their own council taxes. Those authorities will then be expected to collect water rates on behalf of the area water boards as well. I had a meeting this morning with some officials of Tayside regional council. They said that they cannot see for a number of years any system coming into operation which effectively would collect the council taxes or water rates that are due as a result of the changes proposed in the Bill.
The Government are inflicting upon the Scottish people an exercise in political gerrymandering. The proposals will also bring absolute chaos to the provision of local government services and to the collection of the costs of those services. The Government had better understand that, before they progress with the Bill. Irrespective of the political implications of the Bill, the sheer practical chaos
Column 666which will be caused by the attempt to make the Bill work will make the poll tax look simple indeed. The lesson has not been learnt. The Government got themselves badly burned over the poll tax and I thought that, having done that, they would never return to any madcap scheme such as is tied up in the Bill. There are few Tories left representing Scottish seats in the House. I predict that, once the measure begins to bite in Scotland, there will be even fewer in the future.
Mrs. Irene Adams (Paisley, North) : We are not seeing tonight the Government's concern to provide water services in Scotland. Instead, this is a fit of pique by the Government because of the response to the proposal to privatise water in Scotland. The Minister himself received an horrific reply from his constituents, with some 15,000 of them saying that they wanted nothing to do with water privatisation. Ninety-five per cent. of the people of Scotland have said that they want nothing to do with it.
The Government now, in a fit of pique, have decided that they will have privatisation by one means or another. The phrase in the resolution which concerns me is
"pay him such sums as he may direct".
That one phrase covers all tonight's debates on the matter. The boards which the Secretary of State will appoint, or the lackeys whom he will appoint to the boards, will then be directed to
"pay him such sums as he may direct".
When will the Secretary of State decide what those sums are to be? Will the decision be taken first, or will he see what the board has left at the end of the financial year and then take that sum? What will come first--the chicken or the egg? Will he tell the boards what amount they must have left over? Will the boards then have to decide how they are to raise that sum and how will they come to that decision?
Will the boards be asked to sell off the very asset that the people in Scotland have warned them not to sell off--the water itself? Will we see the sale of Loch Katrine? Will the boards then be instructed to rent it back to supply water to the people who have paid for it in the first place? Who will make that decision?
The Tories have never provided water out of the goodness of their hearts. One of the first water companies in my consitituency was set up to provide water not for the common people but for bleaching the cloth in Paisley, a textile town. While the company was providing water for bleaching the cloth, people were dying in typhus epidemics because of the dirty water supply. That is a position to which we could well return under the provision that the water boards must pay the Secretary of State such sums as he may direct. Where will that stop? What will be the ceiling of the sum that he may direct and how will it be collected?
Mr. Foulkes : Does my hon. Friend agree that the Conservative Government are doing the same thing to the Post Office? It is required to pay such sums to the Secretary of State as he may direct. That is crippling the service and making it more difficult for the Post Office to improve its services. It is perhaps paving the way for the privatisation of the Post Office. In the same way--
Mr. Foulkes : I am grateful to you, Madam Deputy Speaker. I was about to come to a conclusion. I was about to say that the Government were paving the way for privatisation of the Post Office. That may well be what they have in mind for water and sewerage in Scotland.
Mrs. Adams : If the Bill does not open the door to privatisation, it is certainly providing the key to that door. It is providing a means whereby the boards will have to raise such moneys. The boards appointed by the Secretary of State will have no choice but to sell off their assets and will force prices up so much that they will price themselves right out of the business of providing water. All that they will then do is set themselves up as an intermediate body which buys back the water that they have sold off and then provides it to the people who have paid for it in the first place. We see yet another hidden tax in the Bill--yet another means of the Secretary of State raising funds by the back door. Those funds will go back into the Consolidated Fund so that once more he does not have to give money from that fund to provide services in Scotland. It is a double measure. First, it gives him the key to the back door to water privatisation, which was so overwhelmingly rejected by people in Scotland. Secondly, it allows him to raise yet further funds to go back into his own coffers.
Mr. Peter L. Pike (Burnley) : When my hon. Friend looks at paragraph (c) of the Ways and Means motion, does she find it remarkable that there should be provision in Scotland to repay over a period certain loans, at the whim of the Secretary of State for Scotland, when, at the time of the privatisation of the water industry in England, the majority of the water authorities' outstanding loans were wiped out?
Mrs. Adams : My hon. Friend makes a good point. The loans were wiped out in the main when the water industry was privatised in England. But no provision is made to wipe out loans when the water is provided by boards in Scotland. I presume that we shall see such a provision when we get the back -door water privatisation.
As I said at the beginning of my speech, the Bill is a fit of pique. The Secretary of State has determined that he will privatise water in Scotland by one means or another. As he cannot do it directly because of the reaction in Scotland when privatisation was first proposed, he now intends to do it indirectly. He will put such a price on water that the boards will price themselves out and will be forced to sell all their assets. The people to whom they sell the assets will set the price at which the water is sold back.
Mr. Connarty : The Secretary of State said earlier that people would not take kindly to having their water charges doubled if that was to pay for the increase in water and sewerage quality that is required in Scotland. Paragraph (c) requires a responsibility for the repayment of loans; paragraph (a) provides for a completely new charge of any sum that the Secretary of State wishes to charge. It is as if local authorities had taken a power not just to borrow the
Column 668money to pay for improvements, but to start giving profits to pay for other services. This is an additional water charge for local authorities.
The Government refused to accept that people in Scotland did not want to be privatised. They have tried by every means possible to make that come about. I think that they will receive the same response as last time : people will not be fooled. People in Scotland are very concerned about the lack of democracy that we are seeing again here. Not only is the Secretary of State appointing yet another quango; he is deciding that he will milk this quango dry--that he will set the charges. We have no means of knowing what he means by "to pay him such sums"; what sums are we talking about? Will he set them at the beginning of the financial year, or will he wait until the end and see what sums the board has? If the Secretary of State sets the goal first, the price of water services in Scotland may well double.
People in Scotland might not object to that if they received those services --if they were assured of a clean water supply and the renewal of sewerage systems that are currently failing desperately. They would not mind if they knew that all the money was being ploughed back into such services. But, as my hon. Friends have pointed out, metering may result in self-rationing : people will simply turn off their water supplies, because they will know that at the end of the week they will not be able to afford the bill. Where will that stop? Where will the price increases stop, as a means of bringing money back into the coffers--such sums as the Secretary of State may determine?
The Secretary of State must tell us exactly how he will go about this and when he will determine what sums will be involved. Will this happen at the beginning of the boards' financial year? Will the boards be expected to sell off assets to pay
"such sums as he may direct"?
Does that simply mean assets such as the land around the water, or does it mean the lochs themselves? Before the Secretary of State goes any further, he must answer all those questions.
Mr. Jimmy Hood (Clydesdale) : According to the well-known saying, "if it isn't broke, don't fix it". Where is the demand for this measure? The truth is that people in Scotland are delighted with water and sewerage services.
I am pleased to see that the hon. Member for Southend, East (Sir T. Taylor) is present. I listened with interest to his remarks on the money resolution, when he paid tribute to the excellent way in which he had been treated by some of his Scottish Front-Bench colleagues. According to an opinion poll in tomorrow's Glasgow Herald , 15 per cent. of the Scottish people now support the Conservative party. That figure is higher than it should be. The hon. Member for Southend, East may have felt nostalgic about his time as a Conservative Member for Scotland, but I am sure that he cannot remember any other time when Conservative support was as low as 15 per cent. People must ask why.
Column 669Scottish constituency? My hon. Friend should tell him that the people of Cathcart are not at all sad that he is not their Member.
Mr. Hood : I was present, and I am sure that the hon. Member for Southend, East had his tongue in his cheek when he said that. These days, there is not much future in being a Conservative in Scotland.
Mr. Maxton : My hon. Friend may not be aware that, before the hon. Member for Southend, East became the Member for Cathcart, he was a member of the old Glasgow corporation. One of the great prides of that corporation was its water supply and waterworks, including Loch Katrine. When the hon. Gentleman was a councillor, I am sure that he took pleasure in sailing across Loch Katrine, because councillors had the right to do so. That privilege will no longer be available to the elected members who represent the new future Glasgow authority.
Sir Teddy Taylor (Southend, East) : I certainly did not take advantage of all the perks on offer to councillors, which were scandalous : that was a thing for Labour councillors to do. [Interruption.] May I offer a little advice to the hon. Gentleman? I must tell him and his colleagues, who are moaning and shouting, that if they had a good argument and put it nicely and constructively to the Secretary of State, he would accept their case. I did just that to save King's Park from the indignity of being part of Lanarkshire. Why not try that? Opposition Members should ask the Government nicely, reasonably and sensibly to consider their case. They might be amazed at the results.
Mr. Hood : I would be flabbergasted, absolutely amazed or any other adjective that the hon. Gentleman might like to use. Will the Government withdraw this nonsense of the Bill? [ Hon. Members :-- "Please."] After all, 95 per cent. of the Scottish people do not want it. Will they please withdraw it? That suggestion does not seem to work.
The hon. Member for Southend, East made an unfortunate remark about councillors' perks. These days, there are not many of them. In 1974--
Mr. Hood : I thank you for your guidance, Madam Deputy Speaker. May I just say that, when a councillor attended a meeting of a water board in 1975, he received a £10 attendance allowance. In 1993, nearly 10 years later, councillors who attended such meetings barely received £10. To suggest that councillors still receive great perks is nonsense. One of the great disasters of local government is the fact that proper remuneration is not offered to those who are supposed to be accountable to the electorate for a council's work.
Mr. Wray : The Secretary of State got it wrong when he said that he would get half the required £52 million from the private sector. To date, he has received £2.5 million. The boards that will be established will do the same as the health boards : they will sell off all their assets and make the ratepayers pay for anything to do with water.
Mr. Hood : We have heard much from the Government about how the private sector will be funded. One has only to think of Crossrail, the channel tunnel and all the other wonderful projects to see that they have not come up with the goods.
Since I came to the House in 1987, a short time ago--it sometimes seems a wee bit longer--these motions have always confused me. They are always ambiguous. We have been asked to pass a measure that gives the Secretary of State a range of powers with which we do not necessarily agree. The measure is open-ended and allows him to do as he likes, without real accountability to the House.
Paragraph (a) says :
"to authorise the Secretary of State to direct a water and sewerage authority established by the Act to pay him such sums as he may direct, being sums not required by them for the exercise of their functions".
What are "such sums", how are they worked out, and who will decide ? Will there be an equation for working out that sum ? Should we not be told what those sums are before we pass this measure ? A few weeks ago, a money resolution mentioned "something like £4.6 million" but we did not know what the "something like" was. What does the term "such sums" mean ?
This resolution will create a water tax that will provide revenue for the Government. As my hon. Friend the Member for Paisley, North (Mrs. Adams) said, it will go into the Treasury's Consolidation Fund, not into investment to provide better services. Almost two years ago, the Government promised us all that they would not increase taxes. They told us that they were about cutting taxes but, as soon as they were re-elected, their policies were all about tax.
I need not remind the House that the Chancellor has admitted that the measures introduced by him and his predecessors were equivalent to a 7p increase in income tax. The Government used to say that the Labour party would spend, spend, spend. This Government tax, tax, tax, but they do not necessarily spend.
Mr. Pike : Does paragraph (a) mean that, if the motion is carried, water authorities in Scotland will be asked to produce not only income for investment and for their revenue expenditure but additional income for the Government's Consolidated Fund ? As my hon. Friend says, it is a new source of indirect taxation.
Mr. Connarty : I wonder whether my hon. Friend is aware that the laws that govern the raising of funds for local authorities contain a clause that says that a local authority shall raise sufficient funds for the provision of its services. In the High Court judgment against Stirling district council when I was leader, the High Court judges said that that should be interpreted to read "only" sufficient funds as are required for the provision of its services.
Does my hon. Friend not find it rather strange that the Bill says that this will have the boards raising more than sufficient funds--it states this clearly--
Column 671"required by them for the exercise of their functions"? Is it not an oddity that this Bill provides for the raising of additional sums other than those required for water and sewerage delivery ? It should be explained by the Secretary of State, and possibly even withdrawn, so that they raise only sufficient funds for the purposes for which they are set up.
I am pleased to see the Secretary of State now sitting in his place. The hon. Member for Southend, east said that, if I asked you nicely, you would respond much better to our representations. The hon. Member for Southend, East even suggested that, if I asked you nicely to withdraw this ridiculous proposal, you might do so.
Will the Secretary of State consider withdrawing this ridiculous measure which 95 per cent. of the people of Scotland do not support ? [Interruption.] That is as nice as I can be. If hon. Members do not think that that is nice, they have not seen me being nasty. My hon. Friend the Member for Dundee, East (Mr. McAllion) mentioned English Members, and I am thankful that one or two have arrived since I began to speak.
Much has already been said about Strathclyde. As a Member of Parliament, I have had my moments with many departments within Strathclyde regional council, but one of the most satisfactory departments with which to deal is the water and sewerage department. If one rings it about a problem, one gets an almost instant response. In addition, it provides a considerably cheaper service than any in England and Wales. It provides an excellent service at almost half the cost of that elsewhere, but we are discussing a measure that will destroy it all.
I do not often agree with the hon. Member for Banff and Buchan (Mr. Salmon), but he made a valid point. He said that, at this stage, the Secretary of State was not talking about introducing legislation to cut water supplies, but I am sure that metering will lead to it. It has happened with electricity, so it will undoubtedly happen with water.
Mr. Ian Davidson (Glasgow, Govan) : Does my hon. Friend agree that, if the taxation on water and sewerage authorities is set too high by the Government, it is likely that many more people will be disconnected ? Such a method of taxation is likely to result in far more disconnections than would conceivably be the case otherwise, and is it not regrettable ?
The resolution also deals with the area boards. I have already mentioned Strathclyde, and the excellent brief states that a west of Scotland water authority will have between six and 10 members. We are told that taxes or levies, whatever one wishes to call them, will be placed on the boards, and I wondered who would take part in the negotiations.
There must be two sides in a negotiation ; one represents one interest and someone else represents the other. If a
Column 672member of a quango involved in the negotiation is also to decide whether one has a job, it makes the job of negotiating much easier. If the local authority represents the community, one expects it to resist the Secretary of State and argue its corner, but the result would not be the same if the area board was a quango appointed by the Secretary of State. If there is any disagreement, the Secretary of State will do what he did with the health boards--someone else will be appointed.
We have also heard about the consumer's interest, so let us consider the customers council. One would think that the customers council would look after the interests of the consumer and I am pleased to see that our expert on consumer affairs is here to listen to the debate. Who appoints the customers council?
"being sums not required by them for the exercise of their functions"?
The Secretary of State could decide not only who to appoint to the board, but how much they should be paid. Presumably he would also be able to amend that payment during their time on the board. By using that part of paragraph (a), presumably he could point out that the amount of money received by members of the board was not really required, and could therefore threaten them with a drastic reduction. That would give him another power : to compel them to agree with his evaluation of how much they should be paying in tax.
Mr. Hood : I think that we are hearing the analogy of the carrot and the stick--patronage or the sack. In fairness, I must come to the Secretary of State's defence for a moment. His history is not one of the stick. It is quite an enjoyable experience being sacked by the Secretary of State or the Scottish Office, because one is well looked after. When I was a miner in the pits, if anyone got sacked they were down the road with a part of the pay that they had earned on that day. If someone is sacked by the Secretary of State, they can get £80,000, a pat on the back and a wee mention in the new year's honours list, so he has a good track record of looking after his cronies. To return to the resolution, because I have been tempted away, Madam Deputy Speaker, the truth of the matter is that patronage is a worrying feature. The vagueness of the resolution and the powers it seeks are also worrying.
Mr. Connarty : Is there not a more worrying dichotomy in paragraph (a)? If one of the functions that they have to exercise is investing in water and sewerage infrastructure and if the Secretary of State has an instruction, as is the case with other departments--the Post Office, for example--to find funds and such sums as he decides, he will be tempted not to place on the authorities the type of functions that we would wish, such as improvement of and investment in the infrastructure and in sewerage and water systems. That would lead not to more money to pay for those investments but to spare money, which would be returned to the Secretary of State. Those are the sort of grand pressures involved--the choice between investment
Column 673and paying back money on investments and giving back free money to the Secretary of State for some other purpose set by the Treasury.
Mr. Hood : My hon. Friend makes a valid point. May I refer to the earlier debate about the cost of the reform ? Perhaps some people in the Scottish Office think that they will understate the cost of the reform and make up for the deficit and additional costs by putting less hidden tax on the water consumer.
I am trying to come to the close of my remarks--[ Hon. Members :-- "Oh, no."] My hon. Friends are so kind.
We are being asked to pass a resolution that gives powers to the Secretary of State--or whoever holds that office--and to faceless people in the area boards, and we are told that the customers council will look after consumers' interests. No Conservative Member has suggested that we will provide a better and cheaper service to the consumer. I hope that the Minister will try to answer those questions, among others, when he has an opportunity to respond to the debate. Where will the real negotiation take place ? Will it take place in Scotland, with the area boards with the Secretary of State ? Will it take place in representations from the customers council, appointed by the same people--the same cronies who probably go to the same meetings at night and the same parties ? Even worse, will all the decisions be taken in the Treasury, just across the road ?
Mr. Davidson : Does my hon. Friend agree that there is a danger that many of the decisions will be taken at social functions of the Conservative party ? Is he aware that there have been many occasions on which appointees to health boards and the like have been with Ministers at party political functions on behalf of the Conservative party ? Does he believe that it is a grave danger to the system of the water industry that might be established, that the appointments would not be above board ; that they would be conducted solely within the ranks of a fund-raising event for the Conservative party ?
Mr. Hood : That concern is not limited to the Bill. It has been expressed about much legislation that has passed through the House since I have been here. I am sure, Madam Deputy Speaker, that you have sat doing your excellent duty and listened to many concerns about that in special ways and means motions.
It is a bit of a cheek, is it not? I heard the hon. Member for Kincardine and Deeside (Mr. Kynoch) speaking about 22 members of a council that employs 2,000 people as if it was a large number. The we consider what happens in appointments to boards--to health boards and to that enterprise board, to that local enterprise company--all patronage, all placepeople. When we talk about "back to basics", is it not back to common values, decency, things that one can trust? Is that what "back to basics" means? How can one trust the judgment of a person who is there to so-called represent one on a customers council or a health board, if that person is there by the patronage of a political appointment?
Surely, if we talk about decentralisation, whether it be in the case of health boards or whatever, we should have democratic elections--[H on. Members :-- "Hear, hear."]-- communities represented by people who are accountable to the community. Surely that is the way forward.