House of Commons Hansard Debates for 17 May 1994

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circumstances, it does not make sense to perpetuate the current areas for the provision of water and sewerage alone.

Mr. Tam Dalyell (Linlithgow) : The arguments were not comprehensively answered in Committee. One particular problem was referred to at length yesterday, at a briefing by Lothian purification board at Clearwater house in Livingston which I attended, and at which the Scottish Office was represented at senior level. Who will take responsibility for the problem of pumps that no longer pump water from coal mines into rivers such as the Almond ? There is a real, massive, urgent ferruginous problem of which the Scottish Office is well aware. The unanswered question is, who will pay for the investment created by the problem of pits no longer working and pumping, and all the difficulties that arise therefrom for the water of central Scotland ?

Mr. Lang : I have no doubt that the Coal Board and the existing water authorities will have some responsibility in that direction, but that is not the subject of these amendments.

Mr. Wallace : Of course, the islands councils have not changed, so what is the argument for incorporating them into much larger water authorities, when, for the past 20 years, they have had their own water and sewerage authorities ?

Mr. Lang : If I may, I shall come to the islands councils later in my remarks.

The issue that has dominated the debate, however, is the question of privatisation.

Mr. Eric Clarke (Midlothian) rose

Mr. Lang : I really must make some progress, if the hon. Gentleman will allow me.

Mr. Clarke : It is central to that point.

Mr. Lang : All right, I give way briefly on that point.

Mr. Clarke : It is on the same point as that made by my hon. Friend the Member for Linlithgow (Mr. Dalyell). During the privatisation of coal in the Coal Industry Bill, an unsatisfactory answer was given to us on the same subject. It is a serious problem, not only in Scotland but throughout the United Kingdom, especially in Northumberland, Durham and other places of that nature, to which hon. Members have drawn attention. It is very important, because if that problem is not addressed, it will pollute all the waterways and even the water that sinks into the reservoirs from where we draw water.

5.30 pm

Mr. Lang : I envisage that the responsibility on that matter lies with the Coal Board and if I find out that there is a problem that takes that matter outside its responsibility, I shall certainly write to the hon. Gentleman and to the hon. Member for Linlithgow (Mr. Dalyell) and clarify the position.

The present debate has been dominated by the question of privatisation. I welcome the opportunity that the debate gives me to say yet again to the House that privatisation is not part of the Government's proposals. The hon. Member for Hamilton raised the question of the Government denigrating the fears of those who suggested that water was

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to be privatised. I do not denigrate those who have fears about those matters, but I denigrate those who have placed those fears in people's minds without foundation.

The hon. Gentleman quoted the Prime Minister in March last year, but those remarks of the Prime Minister were before the Government had consulted and considered and decided on their way forward in Scotland. Now, my right hon. Friend the Prime Minister has confirmed, along with others in the Cabinet including myself repeatedly, that we are not privatising Sottish water, nor are we planning to privatise it.

May I go back

Mrs. Helen Jackson rose

Mr. Welsh rose

Mr. Lang : I have already given way to the hon. Lady, so I shall give way to the hon. Gentleman.

Mr. Welsh : I understand what the Minister is saying, but does he understand the scepticism with which the remarks are greeted ? People believed his Government colleague in England, Neil Macfarlane, the then Under-Secretary of State for the Department of the Environment, when the boards were created and he gave a clear assurance that there would be no privatisation. Yet, two years later, another ministerial colleague said that the boards were perfectly placed for such privatisation. Does the Secretary of State understand the scepticism when such clear assurances were given in the past and were clearly broken ?

Mr. Lang : The assurances that I am in a position to give are regarding water and sewerage in Scotland.

May I trace some of the history of the matter ? As long ago as 1991, we consulted on the matter and we indicated that the new organisations for water and sewerage may need to be separated from local authorities. In June 1992, we appointed financial consultants to secure advice on the basis of which we framed a number of optional proposals, which we included in our consultation paper published in November that year. That paper canvassed eight options in an entirely evenhanded way. The fact that it took longer to explain some of those options than it took for others is entirely irrelevant to the underlying attitudes of the Government and relates solely to the novelty or the complicated nature of the proposals being canvassed. The option that we decided on was similar to option D in that consultation paper. Having listened to the views that were submitted, we specifically rejected the privatisation option and chose instead three publicly owned water authorities. We were told at the time that it would be the acid test of the Government's ability to listen to public opinion in Scotland whether we chose a separate Scottish solution from that which had been chosen south of the border. We met that acid test. Indeed, the solution that we brought forward thereafter was welcomed by the Opposition a year ago. They even claimed credit for the fact that they had secured a success in persuading us not to privatise Scottish water. What a difference a year makes.

Mr. Alex Salmond (Banff and Buchan) : The Secretary of State knows that the Scottish nationalists were not that gullible a year ago. With respect, he has not answered the point of my hon. Friend the Member for Angus, East (Mr. Welsh). My hon. Friend made the obvious analogy that assurances were given south of the border which were

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subsequently broken by Ministers. There has been some speculation over the past few days about the Secretary of State's position in Scotland. Can he tell us the most recent estimate of the opinion on water privatisation held by the hon. Member for Stirling (Mr. Forsyth) ? For example, if that hon. Member became Secretary of State for Scotland, could this Secretary of State be absolutely certain that his successor would hold the same opinion ?

Mr. Lang : The hon. Gentleman is being frivolous. I assure him that my hon. Friend the Member for Stirling, like all other members of the Government, strongly and fully supports the proposals that the Government have brought forward. What we have brought forward Mr. Graham rose

Mr. Lang : I must make some further progress, if the hon. Gentleman will allow me. I know that the House is keen to make progress. We have brought forward a solution that specifically meets Scottish requirements and that is durable for the long term. As some references to the history of water and sewerage have been made in the debate, it is worth pointing out that at the end of the second world war, there were no fewer than 210 water authorities in Scotland. The hon. Member for Falkirk, West (Mr. Canavan) is right to point to the civic pride with which the city fathers in various cities around Scotland and the provosts and councils in various towns took pride in the quality of their water and the provision that they made for it. I understand and respect that. My own great-grandfather was provost of Greenock about 100 years ago and I have no doubt that he took the same pride in the quality of the water there.

In 1946, with the Water (Scotland) Act, introduced by a Labour Government, central Government took powers that were more far-reaching and dramatic than anything that we have contemplated since then to rationalise and improve the handling and the delivery of water services for the future. That Act first provided the basis for most of the powers and duties of local authorities today. In 1967, there was a 13-board structure. In 1975, the present structure came into being. As recently as 1973, there were no fewer than 234 separate sewerage authorities.

We are not proposing some dramatic and sudden change in something that has been in position and unchanged for one and a half centuries. Rather, it is a further progression down the road of rationalisation and improved efficiency which dates back to former times, with the major legislation of the Labour Government of 1946 forming one of the most pivotal landmarks along the way.

Mr. George Robertson : The one continuing thread which goes right through that century and a half and through the period when the Secretary of State's great-grandfather was provost of Greenock is absolutely fundamental to the debate. Those water authorities, however numerous they were, whatever form they took, were run by local councillors, who were elected by the people and were removable by the people. Does not he understand that that is what the people of Scotland are saying today, as they have said over all those years ? They are saying : let control of water and of all commodities be left in the hands of people who are close and accountable to the people of Scotland.

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Mr. Lang : The point that I have just made to the hon. Gentleman is that it was a Labour Government, in 1946, who took the power to rationalise and reorganise and establish their clear authority over the handling of water services.

Let me emphasise the nature of what we are discussing. We are not only talking of a service, but about a substantial industry that employs some 6,000 people in Scotland. That industry supplies about 2.3 million cu m of water each day. It services some 2.2 million households. The water is supplied through some 28,000 miles of water mains. It is collected from some 800 or more sources, including 350 lochs and reservoirs, and there are some 17,500 miles of public sewers. There are 603 or more water treatment plants and more than 900 sewage treatment works.

Sewage treatment produces sludge--80,000 dry tonnes in 1990, which is expected to rise to 140,000 dry tonnes by 1999. That is a major industry which would incur colossal expenses in future development and maintenance and therefore it is vital that it is handled in the most efficient way.

Mr. Michael Connarty (Falkirk, East) rose

Mr. Lang : I must make further progress and then the hon. Gentleman will have an opportunity to take part in the debate. I want to emphasise the scale of the industry and the increase in expenditure that is necessary to upgrade it if we are to meet our targets for the high quality of water and sewerage services that we now rightly regard as important.

I must point out to the House that capital expenditure provision for 1996- 97 will be almost 80 per cent. higher than it was at the beginning of the decade. Present plans provide some £740 million of capital provision for the three years to 1996-97, but about £5 billion is needed in the next 15 years or so--some £2 billion for water services and £3 billion for sewerage. Of that £5 billion, around half will be needed to meet the requirements of EC directives and the balance to provide water and sewerage services to housing and industrial developments and to maintain and improve the existing infrastructure.

We are talking about a major industry which must be run efficiently. We need to take the opportunity afforded by the reform of local government to put in place for water and sewerage the structure that is best tailored to meet the needs of those services, the structure that will most readily accomplish the massive investment programme that lies ahead and the one that will do so in a way that gives best value for money to the customer. That is the structure that we are proposing : three new water authorities. I was asked earlier why there should be three new water authorities. The answer is that that number will provide the most efficient system and the most coherent and comprehensive size of unit. The proposal is based on advice that we have received from our consultants. We need larger units to capture the economies of scale that will be so important in addressing a large investment programme at least cost.

The hon. Member for Falkirk, West (Mr. Canavan) said that we were over- centralising. I have to tell him that we are not a Government who are keen to centralise-- [Interruption.] Opposition Members may laugh, but centralisation and control are fundamental to socialism and are the exact antithesis of our philosophy. Our philosophy is one of decentralisation and that is inherent throughout

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our local government reforms. The exception is the water and sewerage service, where we believe that the overriding need to improve the efficiency of the system requires the establishment of three large units. Not for us a separate Scottish Parliament in Edinburgh to draw powers into the centre from local authorities in Scotland.

The trend of water and sewerage services over the past century or more has been to form larger units to exploit increasingly sophisticated technology. Today is no exception and we would miss an important opportunity to take a further step along that road if we were to perpetuate the current area divisions out of regard, understandable though that may be, for the record of the regional and island councils.

The hon. Member for Orkney and Shetland (Mr. Wallace) asked about the islands. The practical alternative to inclusion in the northern authority is to establish island water authorities legally quite separate from the councils. That proposal was discussed in detail with representatives of the islands, including the convenors of Orkney and Western Isles, earlier this year. We listened to those arguments carefully and with some sympathy. However, the implications for charges if the islands were separate authorities are severe. That is particularly so in the Western Isles, where the price of being a separate authority is likely to be more than double what it could be within the northern authority and in Orkney, the difference could be more than 50 per cent.

I know that the island authorities are anxious to know whether, if they become part of the northern authority, they would be guaranteed to benefit from a smoothing of prices across the northern area. However, I repeat what was said in Committee : we would fully expect the new authorities to move rapidly to uniform pricing. The Bill now also stipulates that the needs of rural areas should be paid regard to by the new authorities and the Secretary of State and the membership of the customers council area committees has been increased from a maximum of eight to a maximum of 12. That will allow a better spread of representation, including from the islands. I understand the desire of the hon. Member for Orkney and Shetland to ensure that an islands representative is a member of the northern authority. I am sure that the claims of any suitable candidate from the islands will be considered very seriously. However, it would be wrong to pre-empt the choice of members in the way that the amendment seeks. The paramount requirement in a small membership is to get the best people for the job.

The hon. Member for Hamilton asked why our plan was the only plan open for Scotland's water and sewerage. It is not the only plan open for the future of water and sewerage in Scotland, but it is the best one. The Government have considered very carefully all the alternatives. We have consulted and considered. We have decided on our policy and we are now asking Parliament to support it. We do that believing that efficiency and cost are vital for those very significant and large industries in Scotland. We are proposing a Scottish solution for the future of those important Scottish industries. I urge the House to reject the new clause.

Mr. James Wallace (Orkney and Shetland) : I associate myself with the remarks that have been made about the background against which this debate takes place. On behalf of my party in Scotland, I extend to the hon. Member for Hamilton (Mr. Robertson) and, through him,

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to his party and the family of John Smith, our deepest sympathy at their loss. John Smith was a great Scot and his contribution to Scottish politics, as well as to British politics, was immense. As has already been said many times, his loss is felt across the party divide.

I understand that the hon. Member for Hamilton also referred to the wife of the Under-Secretary of State for Scotland, the hon. Member for Dumfries (Sir H. Monro), who is unwell. I was born and brought up in Dumfrieshire and I have known Lady Monro for many years. I hope that our good wishes can be conveyed to the hon. Member for Dumfries.

5.45 pm

It would be wrong if we did not fully explore and thrash out the important arguments when we debate the future of our water and sewerage services. Those services have been the key issue in Scottish politics over the past 12 months or more. The Secretary of State said that the issue was not one of privatisation and, as he is a right hon. Gentleman, we must take him at his word. However, he is in no position to say what a future Administration might do.

If people are afraid of something in politics, that is a reality. It is not something that we can discount. People fear that, as a result of the Bill, we are placing our water and sewerage services in a position where they can be more readily privatised in future by a future Administration who may have a change of heart from the current Government's policy. If those services were to remain in local authority hands, that threat would at least be one stage removed. The fear that I have described cannot simply be blamed on speeches made by Opposition politicians.

I have always tried to be very careful about what I have said. No doubt I will be tried if I have, at any stage, misrepresented the position. However, the position was set out quite clearly in the Strathclyde regional referendum. The Government propose to set up three boards which will be appointed by the Secretary of State.

Mr. Jimmy Hood (Clydesdale) : They will be quangos.

Mr. Wallace : As the hon. Member for Clydesdale (Mr. Hood) rightly points out, they will be quangos.

The people of Strathclyde overwhelmingly voted against that proposal. While the percentage of people who voted against the proposal was exceptionally high and not surprising, the percentage of people who actually returned their ballot papers was perhaps the most striking point about the referendum. Those people have been angered because the Government have refused to heed the message that those people delivered in the referendum.

The people in Strathclyde and elsewhere in Scotland voted again on 5 May and they gave the Government their verdict on that important regional council service. The Government again tried to use the excuse that people were voting on national issues. It was a national issue, but it was a national issue about a regional council function. It was not unreasonable for people to take that into account when they cast their votes.

In the aftermath of those elections, I heard the Secretary of State say that he thought the verdict of the Scottish people on 5 May was one of not proven. Of course, "not proven" is a matter of current political debate. The Secretary of State must know, as well as anyone knows, that not proven is a verdict of acquittal.

However, in no way was the Tory party in Scotland acquitted on 5 May. The Tories were found guilty by the

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jury by a large majority. If I may say so, at some risk of extending the legal metaphor, they have been given a deferred sentence. The jury and the court will meet again on 9 June. If the Secretary of State has not learnt his lesson and has not committed himself to good behaviour, a suitable penalty will surely be imposed then.

Regrettably, it seems from the Secretary of State's responses today that he has not learnt the lessons. He maintains that his proposal for three quangos is, in his words, the best solution.

It has been the position of my party throughout that the responsibility for water and sewerage services in Scotland should remain in the hands of people who are democratically elected and accountable to their electorate. That is why we support the amendment to that effect. I accept that if we are changing local government boundaries, it might not necessarily be efficient or sensible to have as many local water and sewerage authorities as there are going to be new local councils. However, if joint boards comprising elected councillors are an acceptable way to run our police and fire services, why are they not an acceptable way in which to run our water and sewerage services ?

The Secretary of State was on weak ground when he tried to give us his history lesson. He referred to what a Labour Government did in 1946, but he missed the obvious point--which was put to him, but which he refused to accept--that, throughout all the reorganisations, authority and responsibility has rested with those who are electorally accountable. He said that water and sewage had to be handled in the most efficient way by people with the most experience.

I have yet to hear anyone on the Government Front Bench suggest that our local authorities--our regional islands councils--have done anything other than discharge their responsibilities with regard to water and sewage in a responsible and efficient way. Who are the people in Scotland who will be able to run an efficient water and sewerage service ? They are all the employees of the existing regional and islands councils. They are the people who have the expertise and experience which have been built up over many years. Nor have the Government made it clear how the new water authorities will have an easier financial route to raise the money that is needed. I understand that the strict Treasury rules will apply to the new water authorities--because they will be within the public sector--as much as they will apply to local authorities. It should be remembered that since 1989, our local authorities have had to have separate water accounts-- indeed, they have managed those accounts--and most of the investment and loan charges have been covered by charges directly on the customer through meter charges, originally through the community water charge and now through council tax payments, and through the non-domestic water rate.

Our argument is that that should continue. Indeed, if something must be sacrificed, surely it is better if the Treasury rules are sacrificed, rather than local democracy. We have not yet had any suggestion of why that course cannot be adopted, other than the fact that the Treasury rules are there and, because they are there, we must abide by them. Perhaps it is time that we examined the merit of the Treasury rules.

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I should like the Secretary of State to give us his estimate of the amount that will have to invested in water and sewerage services to bring them up to EC requirements--and, indeed, what the time span will be. I understand that the time span has lengthened somewhat since the argument was put forward for adapting and changing the new structure of our water services.

Why is it that, unlike the water authorities in England and Wales, Scottish water authorities have not had their debt written off ? That would ease their position considerably. Nor have the Scottish water authorities had the benefit of a green dowry. That raises the question whether large-scale water users--industrial water users--in England and Wales have been put at a competitive advantage to large-scale water users in Scotland, which have not had the benefit of such a massive capital investment.

I acknowledge that the Secretary of State has clearly considered the question of the islands areas. Indeed, he admitted to having some sympathy with it. Before this part of the Bill is debated in another place, I hope that he will think again because there are important arguments for the islands areas to be treated separately. My ideal position is that proposed by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) in Committee--keeping those areas within the control and responsibility of local authorities, the islands councils.

If that is not possible, I would argue for a separate water board for each of the islands areas because we would get a better integrated approach if we had a separate authority. After all, there is no link with any part of the North of Scotland water authority, other than the sea itself. If we are looking at a development involving water services, sewerage services, roads, harbours and quarries, it is obvious that an integrated approach, where we can have the other existing responsibilities in the islands, would make it much easier to plan and develop water and sewerage services. My concern is that if the North of Scotland water authority has a target for the percentage of houses that it must reach and is faced with a proposal to provide a water and sewerage scheme for a small housing development on the western side of Shetland, which might serve only those houses, and a scheme for a housing development in Aberdeen, which would serve 60 houses, the Aberdeen scheme would inevitably take precedence. However, until the water and sewerage facilities are put in place, it may not be possible to proceed with a much-needed housing development--with very few houses, but nevertheless an important one for the community.

If that means that there is a slightly higher price to pay--I should like to see the detailed figures to discover how the Secretary of State comes up with 100 per cent. more in the case of the Western Isles and 50 per cent. more in the case of Orkney--and if we will not get the service at the level price, we must ask whether it is a price worth paying because we will not get the level price for some time. The Secretary of State said that he hoped that the authorities would move to it quickly, but there is the implication--and, of course, the provision for it is in the Bill--that there can be differential pricing, including pricing based on localities. There is a serious possibility that not only will we not get priority, but we will have to pay a higher price, compared to other parts of the north of Scotland area. I hope that the Secretary of State will reconsider the matter.

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I also hope that the Secretary of State will accept my amendment, which would oblige him to appoint a member from the islands area. It is all very well for him to say that he has it in mind to do so if a suitable candidate appears. There is nothing better than obliging him to do so. I am sure that if he does not appoint a member from the islands area, he will always find some plausible excuse for why he has not been able to do so on this occasion.

With regard to the western Scotland area and the many islands there, I know that my hon. Friend the Member for Argyle and Bute (Mrs. Michie) is also concerned that the expertise of someone with some experience of the delivery of water services in the islands areas should be used in terms of the customers council and the water authority.

The House will note that there are amendments in my name and the names of my hon. Friends which would require those who are appointed by the Secretary of State to the water authority or the customers council to make a political declaration--either a direct declaration of membership of a political party or a declaration stating whether any financial contribution has been given to a political party recently. That would be a welcome step in opening up quangos. It is not simply a question of quangos being established ; there is an unhealthy scepticism that those who are appointed to them are not always appointed on the basis of their expertise but because they happen to wear the right party colour. Hon. Members are obliged to make many declarations--obviously, our political affiliations are already known. It would not be a bad thing if we knew the political lights by which those who will be appointed to the quangos are guided.

Finally, I must make it clear that on this Bench we do not have knee-jerk reactions and say that we will immediately want to repeal anything that is done. However, after listening to all the arguments, it is certainly our conclusion that if we have any part of, or influence in, Government after the next election, it would be our intention to find ways of restoring water and sewerage services in Scotland into the hands of locally elected and accountable people.

Mr. John McAllion (Dundee, East) : It is interesting to note the Tory Members representing England who have listened to most of the debate. Obviously, one of them is here because he is a deputy Government Whip and must be here. The hon. Member for Swindon (Mr. Coombs) is here because he is the Parliamentary Private Secretary to the Secretary of State for Scotland and he must also be here. The hon. Member for Luton, North (Mr. Carlisle) was here for more than one hour because the Tory Benches are so empty that it is one of the few quiet places where hon. Members can read in the House of Commons.

It will be interesting to note that when we vote on the new clauses and amendments, out of every opening in the buildings and the palace of Westminster will pour Tory Members who have not listened to the debate and who do not know what the issues are about, but who will guarantee that the amendments and new clauses tabled by the majority parties in Scotland are defeated and that the Government's proposals, which have been rejected overwhelmingly by the Scottish people, will be passed by the House. If ever I have seen a case for a Scottish Parliament, it is the debate taking place in the House tonight.

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Mr. Stewart : I thank the hon. Gentleman for giving way with his customary courtesy. Where are all the absent Scottish Labour Members of Parliament ?

Mr. McAllion : I can guarantee that if the Bill were being debated in a Scottish Parliament by people directly elected by and accountable to the Scottish people on Scottish issues, the Chamber would be packed and every Member would be held to account by the Scottish people. The first requirement of any democracy is that where a Bill only affects the people of a single country, it should be accountable to the people of that country and should not be decided by hon. Members from any other part of the UK.

Mr. Jimmy Dunnachie (Glasgow, Pollok) : Where are their lot ?

Madam Deputy Speaker : Order. Seated interventions are not helpful. If the hon. Gentleman wishes to catch my eye later, he should be a little quieter now.

Mr. McAllion : The Secretary of State said that it was not a part of the Government's proposals for Scotland to privatise Scotland's water. He said that they had consulted on the issue and, having consulted the Scottish people, they had listened. Does he really expect us to believe that ? That comes from the same Government who consulted on the poll tax and, having listened to the Scottish people's objections, went ahead and legislated for the poll tax. 6 pm

Does not the Secretary of State understand that, on Thursday 5 May, there was a massive consultation in Scotland on his proposals to introduce three new super-quangos, and that his party got less than 14 per cent. of the vote ? Does not he understand that the people of Scotland have said no to the three super-quangos ? If he had really consulted and listened to the people of Scotland, the Bill would have been scrapped and we would have gone back to a system where regional councils are the water authorities in Scotland--the way it should be. Nobody believes the Government when they say that they do not intend privatising Scotland's water industries. The same Tory Government continually preaches to Opposition Members that this is a unitary Parliament and a unitary state, and that every part of the UK is treated exactly the same. If privatisation is good enough for England and Wales, the message is that, in the long run, it will be good enough for Scotland as well.

If people in England and Wales can be disconnected from the domestic water supply, sooner or later people in Scotland will be disconnected also. That is the lesson which one draws from the unitary Parliament and unitary state which is supported on the Government Benches, and is supported there only.

For that reason, nobody believes for a minute the Government's protestations on the issues. The Government are not retreating from the principle of privatisation, but there has been a tactical retreat. The Government, under pressure in Scotland, have been forced to withdraw. But when the circumstances allow, they will be back with a vengeance and will be looking to privatise the Scottish water industry. Everybody in Scotland knows that--even the Government's own supporters.

Mr. Gallie : Does not the hon. Gentleman appreciate that Conservative Members believe in the Parliament that represents the Union, but which recognises that there are

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different legal systems in Scotland and England and that there are different customs between the nations ? Is not that one of the strengths of a Unionist Parliament ?

Mr. McAllion : The hon. Gentleman--as always--is compeletely unconvincing in trying to intervene on an hon. Member.

Opposition Members remember what happened in England and Wales. What was the first stage towards privatisation there ? Water was taken away from local authority control, and quangos were set up as the water authorities. A number of years later, when the situation had quietened down, those quangos were privatised. That pattern will be repeated exactly in Scotland if the Government are allowed to remain in office and to carry out their long-term plan for the Scottish people.

I served on the Standing Committee that considered the Bill, and I remember that the hon. Members for Ayr (Mr. Gallie) and for Tayside, North (Mr. Walker) made it absolutely clear that water in Scotland should be privatised. I know that, deep down, the Minister believes that water should be privatised, although he will not say so publicly. We know that every Conservative Member representing English and Welsh constituencies believes that there should be privatisation in Scotland, because they have accepted it in their own constituencies. Why should they not accept it for Scotland ? The Prime Minister has said from the Dispatch Box that he wants water in Scotland to be privatised.

Therefore, we do not believe for a second the protestations of the Secretary of State or Scottish Office Ministers. They may say, "Us ? No, we would never dream of it." But they do dream of it. Their innermost hope is that, in the long run, they will not have to use public money to fund the investment that is required in the Scottish water industry in the next 10 or 15 years, and that the private sector will come in and supply that money for them. The private sector will supply that money only if it can get the profits back out of the water industry, and it can only do that under privatisation. Nobody is fooled by the Government's arguments.

I was not impressed in the least by the hon. Members for Ayr and for Kincardine and Deeside (Mr. Kynoch)--who have at least sat through most of the debate--and the pantomime which they had between them. They tried to suggest that there were fewer quangos in Scotland now than ever before. Hon. Members know fine well that if the Bill gets on the statue book, more people will be appointed to quangos in Scotland than we will have elected councillors in Scotland. That is the state to which the Conservative party has reduced Scotland. It is undermining every aspect of democracy in our country.

There is no democracy in this House or at local government level. We have quangos, centralisation and authoritarian decisions which are taken here by people who do not represent the Scottish view. The Conservative party wonders why it does so badly at elections in Scotland. If it were prepared to listen to the Scottish people, it might understand why it does so badly.

The hon. Member for Ayr thinks that, in a fringe meeting at the Tory party conference with a 10 or 15-minute speech, he convinced Tory activists of the strength of the Government's case. The hon. Gentleman has had two years since 1992 to convince his own

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constituents, and I am sure that I do not need to remind him of the result in Ayr in the Strathclyde referendum on water. Ninety-three per cent. of his constituents voted against the Government's proposals. He supports those proposals and tried to sell them to the people of Ayr during that period. He failed to convince them that the proposals are right.

For the Secretary of State to tell us that his proposals are the best possible for Scotland is absolute nonsense. It is not for the Secretary of State to tell the people of Scotland what is best for them. It is not even for me or for my hon. Friends on the Front Bench to tell the people what is best for them. The people tell us what is best for them, and that is how democracy works. But so divorced from democracy has the Tory party become that it no longer recognises when it has been completely undemocratic and has done things which, in the long run, can only destroy the Tory party in Scotland.

I speak in support of new clauses 1, 15 and 20 because they seek to re- establish regional councils, through bringing together the new, single-tier authorities into joint boards. I do not see any difference between the Scottish National party's amendments and the new clauses proposed by my hon. Friends. Under the joint board provisions, those will be bodies corporate which are covered by statute. Therefore, under the requirements placed on bodies corporate such as joint boards, it will not be the Secretary of State who appoints people to those boards but the constituent councils. In reality, the SNP amendment and the new clauses tabled by Labour are the same.

In the circumstances, the idea that joint boards could be the new water authorities is not the best that can be achieved for Scotland, but it is the best that can be achieved through this place. The best would be that the Government for once actually listened to the Scottish people, and what the people are saying came across loud and clear on Thursday 5 May. The Conservative party was reduced not to fourth place, but to fifth place in Scotland--if one includes the independents--with less than 14 per cent. of the vote.

I and the hon. Member for Tayside, North come from Tayside, and the Conservative party held Tayside beyond challenge, it was thought, in the early 1980s. When I came on to the council in 1984, the Tories held 28 of the 46 seats, and there was no party within touching distance of them. Ten years on, the Tories hold four seats out of the 46 in Tayside regional council and they received one in five of the votes cast in the Tayside regional elections. An area that was once regarded as the jewel in the Tory crown in Scotland is now almost absolutely anti-Tory. Even the Tory councillors in Tayside do not agree with what the Government are doing to the people of Scotland. The Conservative party is so remote from the Scottish people that those people go to the ballot box with one view in mind--"How do we get at this Government ?" In some areas, that means voting for the SNP, while in others it means voting for the Liberal Democrats or Labour. Wherever the opposition to the Tories is, that is where the Scots go and that is how they vote.

If Conservative Members cannot see that, they are terminally in decline. I look forward to the day when every single one of them who represents a Scottish constituency is wiped from the face of the electoral map in Scotland, and we can have a Scottish Parliament in which we will decide things for ourselves.

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Mr. Dalyell : It may not be entirely their fault, but do Ministers realise how much senior Ministers in our system are deferred to and become cocooned ? I wonder whether the Secretary of State realises how doubly friendless he is on this issue.

First, the right hon. Gentleman is friendless among those who understand the water and sewerage industries. I went to a meeting yesterday of the Lothian purification board in Livingston when water experts from right around Scotland were present. He did not have friends there, other than the loyal representatives of the Scottish Office. When people such as Dr. Jean Balfour say how terrible the policy is, it confirms the argument of my hon. Friend the Member for Dundee, East (Mr. McAllion).

I think that I was the only Opposition Member who, rightly or wrongly, did not sign the "Claim of Right". I have a particular political history, which entitles me to say this to the Secretary of State. In view of the election results and the fact that the Scottish people can see that such a huge percentage are against water privatisation, which is an emotional, central and important issue, if he cheerfully overrides those views--saying that they are of no account--it will go far beyond water. The issue will become the attitude of people in Scotland towards the Union. Because of political history I, of all people, am empowered to tell him that if he goes ahead he must not start lamenting when the Union turns sour.

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