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Mr. Graham : I was born in Glasgow. When I was a young boy, there were wells in every part of Glasgow and if people felt like a drink they just had to turn the water on--it was free. We have all seen animals--cats, dogs or whatever--supping the free water.

I also lived in Govan when I was a kid--in Elder park. There was a rumour that people became Govanites if they fell in the water in the park. It was a great honour to be called a Govanite. If someone falls in the water there now, under the Tory proposals, they would not only get a scolding from their mother but they would probably have to pay for the water that they used in the pond.

I am astounded at the Government's reluctance to accept the referendum that was held by the people of Strathclyde and their elected members and adjudicated by a neutral body. The figures that I am holding here are the result of one of the most democratic decisions ever reached by a huge proportion of the population of Strathclyde ; 1,194,667 people voted no to the Government's proposals.

The Government have tried to run roughshod over the opinions of those people, as if to say that 1.2 million people are kidding, or that they have no brains and canna get it right--as if to say that the Government are the only ones to get it right. That is absolute nonsense.

I see that the Secretary of State has a pencil in his mouth. Perhaps because of this Government, some day when he is putting a glass of water to his mouth it might cost him about 10p.

If the referendum had taken place throughout Scotland the floodgates would have been opened. I am sure that the result would have been the same throughout Britain and that a higher percentage would probably have been against in the highlands, which are awash with water. The people there certainly would not want it to be privatised in the fashion that the Government propose.

I am appalled that the Government are continually trying to water down the Strathclyde results. They are

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trying to push them under the carpet and it will cause one great fountain. A huge eruption will take place at the general election. 6.15 pm

I do not call those three bodies quangos, Madam Deputy Speaker. I call them "langoes". Do you know what the headlines will be in the Scottish papers ? "Lang goes--drowned by the people of Scotland." I am sure that that is what will happen.

Earlier, we heard the Secretary of State say that there was no way that they would privatise water and we have heard other hon. Members repeating old statements to the House. I will remind him. In December 1984 Neil Macfarlane, then Under-Secretary of State at the Department of the Environment said :

"We have absolutely no intention of privatising the water industry".--[ Official Report , 19 December 1984 ; Vol. 70, c. 457.] By February 1986, the right hon. Member for Mole Valley (Mr. Baker), then Secretary of State for the Environment, was telling the House that the Government were ready to privatise water. In December 1984 it was, "No privatisation", by February 1986 it was "Yes, privatisation" and by 1990, it was privatised.

Last week, in an interview with The Courier and Advertiser , the Prime Minister did not rule out water privatisation in Scotland completely. He said :

"It's not going to be privatised in this Parliament. It's not going to be privatised for a long time. It's gone into public bodies. Whether we will ever return to that in the future we don't know. No one ever says never in politics if they are wise, but there are no plans whatsoever to privatise water in Scotland".

Is that the same sort of promise as Neil Macfarlane's promise that the Government had no intention of privatising English water ? It is no wonder that the Scottish people do not believe the Government when they promise that they have no plans to privatise Scottish water. We are sick and tired of seeing Government promises broken. One broken promise that got my goat was when they said that they wouldna increase prescriptions charges. Look at the price of prescriptions now, Madam Deputy Speaker. It is a punishment --an absolute evil--to be ill under this Tory Government. Their punishment of putting VAT on fuel is horrific. They do not understand the world that we live in.

Mr. Bill Walker (Tayside, North) : The hon. Gentleman should know that, under the United Kingdom's unwritten constitution, no Parliament can bind a succeeding Parliament to anything other than matters within the jurisdiction of the European Union. Thus far, water does not come under the European Union.

Mr. Graham : I find that hilarious. We have had Conservative government for nearly 15 years. They have kidded the folk on at every election, saying "We'll not do this" or "We'll not do that" and then they have done it. They said, "The lady's not for turning" and they said, "We'll go on and on." I am sick and tired of it. I do not have water on my brain, but perhaps they have. Perhaps the hon. Gentleman believes it when the Government say that they will not privatise water in Scotland. They are up a gum tree--the biggest gum tree that has ever grown.

I want the Secretary of State to dump this Bill. He should not foist what is happening in other parts of the world on to us. We have an efficient water service--a service into which local authorities have channelled their

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energies, to make it one of the best and cheapest in the country. They have given us water that we can drink proudly and boast about. I will bring you a glass of water from my house, Madam Deputy Speaker. You would probably have to pay 30p a glass for it, but I do not pay that in Scotland, where every woman, child and elderly person can turn on the tap and have a damn good drink. They are not paying through the nose or into the private coffers of some entrepreneur who has decided to buy a few shares in water. Water is owned by us, and drunk by us, and I want it to be kept by us.

Mr. John Home Robertson (East Lothian) : I am grateful to my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) for breaking through the sense of melancholy and sadness which pervades the Opposition Benches just now. Clearly, there is a sense of shock on this side of the House, but we have to come to grips with the issues. We have to tell the Government that this type of legislation is not tolerable and that they will not be allowed to get away with it in Scotland or anywhere else.

The Secretary of State for Scotland prefaced his remarks by saying that we had to return to the issues of state in Scotland today and consider this controversial issue. I have news for the Secretary of State for Scotland : this is not a remotely controversial issue. It is one of very few issues about which it would be impossible to start an argument in the streets, households, pubs, clubs or anywhere else in Scotland today. There is no support anywhere in Scotland for the proposal to take the water and sewerage industries out of the control of democratically accountable local authorities.

We all knew that. If the Secretary of State required proof of it, he received that proof from Strathclyde regional council. In a 71.5 per cent. turnout of electors in Strathclyde, 97.2 per cent. gave a very clear answer to a very simple, straightforward question. There was nothing obtuse or convoluted about the question on the ballot paper that was put before the people of Strathclyde.

It explained what the Government wanted to do. There was no mention of privatisation ; it was simply explained that the Government wanted to transfer control of the water industry from democratically accountable local councillors to nominated quangos. What did the people think of that ? Some 97.2 per cent. said that they wanted their water and sewerage industries to remain under the control of their local authorities.

Frankly, the result did not surprise me. What surprised me was the massive turnout of electors. I am amazed that even this Government think that they can shrug it off. As Sir Michael Hirst would say, it was a "poke in the eye" for the Government. That is how he dismissed the recent regional election results. How many more pokes in the eye do the Government require before they understand what is going on ? I have no doubt that the result would have been exactly the same if the question had been put to my constituents and those of my hon. Friends in the Lothian region. It is no wonder, because the service is provided very well by democratically accountable local authorities and their staff in every part of Scotland. People value their right to influence decisions in this essential industry.

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I am very proud that an elected local councillor from my constituency, John Ross from Musselburgh, recently took the chair of the water and drainage committee of Lothian regional council following the recent elections. He and his colleagues, elected by the people of the Lothian region, have a mandate to take decisions which affect that industry. He conducts surgeries so that people from his ward and other parts of the Lothian region will be able to go along and say, "We don't like the way in which you are managing these services ; do something about it." That is what happens at the moment. There is plenty of evidence that the water and sewerage industries are being operated in a responsive, as well as responsible, manner.

What is the alternative offered by the Secretary of State for Scotland ? He proposes that there be three monster quangos, nominated and appointed by him personally. They will not be accountable to the people of Scotland in any sense of the word. Will they hold surgeries for people to come to see them ? There is no chance of that. They will hold meetings behind closed doors like the rest of the quangos in Scotland and they will not be accountable to anyone.

We have been through all the issues over and over again in Committee and they have been discussed plenty in Scotland. Whatever else this issue may be, it is certainly not controversial. There is no support from any quarter for what the Secretary of State proposes.

If they are established, the quangos will be unjustifiable and intolerable. I agree, for once, with my hon. Friend the Member for Linlithgow (Mr. Dalyell) that it raises a particularly dangerous constitutional issue. If we impose this sort of rubbish legislation on Scotland, it raises fundamental questions about the credibility of the Union and the Parliament.

I welcome, above all, the statement made in Committee by my hon. Friend the Member for Hamilton (Mr. Robertson) in his capacity as shadow Secretary of State for Scotland. He said that, if the legislation is forced through and the quangos are appointed by the Secretary of State for Scotland, one of my hon. Friend's first acts upon assuming his responsibilities as Secretary of State for Scotland following the next general election will be to demand the resignation of the quangocrats so that we can replace them with directly elected local councillors. That is what the people want, and that is what they will have.

Mr. Jimmy Wray (Glasgow, Provan) : Thank you for calling me, Madam Deputy Speaker. I know that we are short of time and that quite a number of hon. Members wish to speak in the debate.

It is absolutely disgraceful that we are debating an issue that takes democratic control away from the people of Scotland and that the House and the Scottish people are being misled.

I do not know how any Government could talk about privatising boards, quangos or any other system after looking at the evidence from down south-- the disconnection of meters, the extortionate charges and so on. All those systems have failed ; they have created only misery. I remember very well being told in debate that the private sector would invest the money needed to provide the services. We know from the media where the money went and who invested it. The private sector has not paid for the services ; the people who are paying the bills have paid for them. Charges have increased by possibly as much as 70 per cent.

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The Secretary of State for Scotland and the hon. Member for Ayr (Mr. Gallie) said that, as far as they were concerned, the problems could be solved by this system. No one wants quangos or privatisation in Scotland, but the Government never paid any heed to that at all. It is remiss of the Secretary of State for Scotland to mislead the House as he did today. He said that there would be a great deal of investment as far as local government water and sewerage industries were concerned. That is nonsense, and the Secretary of State for Scotland knows it.

I will take the right hon. Gentleman back through the years to a paper that he knows very well. In 1991 the Clyde river purification board and the sewerage department of the Strathclyde regional council formed a working party. The Secretary of State for Scotland was well informed about the proposals that were put forward at that time. The working party talked about a number of schemes and a plan that would stretch over 15 years and cost £920 million. It maintained that the profile of the plan would be £42 million in 1994, £90 million in 1995, 1996, 1997, 1998 and so on to the year 2003. The amount would then be reduced to £55 million in 2004.

Eight projects were proposed. I am sorry that the hon. Member for Ayr has left the Chamber, because his project in Ayr was affected, which is important. As a result of the lack of response from the Department of the Environment and the Scottish Office, the Dalmuir sewage works will be delayed until 2001 ; the Ayr sewerage scheme will be delayed until 1999. Those eight projects will cost £102 million, £41 million, £59 million, £350,000, £1.15 million, £1.05 million, £225,000 and £1.5 million. Only one project has been started--the Kelvin valley project.

6.30 pm

The Secretary of State knows about those works that the EEC asked us to implement, the incentives that it was going to give and the directives that were issued in a 15-year period, with a deadline date in 1997 that will never be met. The Scottish Office Environment Department sent a letter in January 1991 and another in July 1992, when the warning bells were sounded by the River Clyde purification board. It said that it could never implement any of the directives because there was a shortfall of £8 million. The Secretary of State has known that for some time.

Let us suppose that the shortfall of £8 million in one year continues throughout the 15-year plan. The document, "Investing for the Future" emphasised that the private sector would then come in and give the money. However, the Secretary of State for Scotland never mentioned the private sector and its investment, because very little investment is coming from the private sector, and I shall tell hon. Members the reason. It is a result of the referendum, which was a result of the opposition of Labour Members to boards, quangos or any type of privatisation.

I shall not forget the time when the Prime Minister, at Question Time in the House, said that, yes, the Government would privatise Scotland's water. Every Member of the House knows that, unless that investment is forthcoming, we can forget about Upper Clyde estuary improvements ; we can forget about Scottish coastal waters and bathing waters. There is no way that we shall ever meet the deadline and there is no way that the Government will supply the money. Every local authority has a responsibility under the Water (Scotland) Act 1946 and the Water (Scotland) Act 1980 to make water wholesome for drinking for the public.

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We already know how many people oppose the proposals for quangos and the dishonesty. We could go back to 1992, when The Herald published an editorial entitled, "Yet Another Fine Mess". The proposals were called "Laurel and Hardy" proposals.

Mr. McAllion : The minority in Scotland.

Mr. Wray : The Government.

The Strathclyde regional council sent a letter to the Scottish Office, saying that the estimated cost was £45 million for water and £45 million for sewerage. Also, £60 million per year would be needed to implement the EC requirements. The letter also mentioned the shortfall. The 15-year plan would take about £750 million, and £900 million would be needed to implement the requirements of the Government. The council also said that the total sewerage bill would be £990 million, but that £1,300 million would be needed to implement the EEC directives.

The Secretary of State told us at great length how much would be done, but he never told us about the total expenditure and that he will never be able to meet that target.

I shall give the House one piece of information that is relevant and important to Scotland. It is said that the total bill that must be met for Scotland's water is £4.5 billion in a 15-year period, and the Government have proposed to give only £3 billion. That leaves a shortfall of £1.5 billion. When the River Clyde purification board and the sewerage department wrote to the Scottish Office, they were told that Strathclyde regional council would be responsible and that they would have to take the money from current revenue or cuts in other services or capital receipts from selling off assets. That is important because, in answer to a question, the Secretary of State for Scotland told me that the boards will have the responsibility for selling off the assets when they take over, and that that is the way that they will make them pay.

In the last letter that was sent, the policy and resources committee of Strathclyde regional council asked the sewerage department to give it the minimum legal requirement over a five-year period. It sent the estimated cost, and the Scottish Office was notified that it was £500 million. The council was told to cut it to £225 million. The result was a delay in 53 proposed schemes of from four years to three months.

The Secretary of State for Scotland never told the Opposition how the plans for the sewerage and water departments were being wrecked. The type of revenue that has been proposed and the allocation that is supposed to be coming from the Scottish Office will never meet the requirements. We shall meet those requirements only by keeping water in public control.

Mr. Salmond : As often happens, the hon. Member for Renfrew, West and Inverclyde (Mr. Graham) put his finger on one of the buttons of the debate when he mentioned the admission by the hon. Member for Tayside, North (Mr. Walker) that one Parliament cannot bind another Parliament. That is absolutely true. [Interruption.] If the hon. Member for Tayside, North holds himself for a few seconds, he may intervene later.

Obviously one Secretary of State cannot bind another Secretary of State. We know, as I said earlier, that there is speculation about the Secretary of State's position. He may or may not be Secretary of State for Scotland in a month's time. If it holds true that one Parliament cannot bind

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another, it also holds true that the current Secretary of State cannot bind the hon. Member for Stirling (Mr. Forsyth), or the hon. Member for Eastwood (Mr. Stewart) if the honour fell on him. He could not bind the hon. Member for Tayside, North, if he was called to serve as Secretary of State in a few weeks' time.

It is absolutely reasonable for Opposition Members

Mr. Wallace : That would be very unreasonable.

Mr. Salmond : That would not be absolutely reasonable, but it is certainly reasonable for Opposition Members to ask--given the history of the assurances that were given south of the border in 1984, which were then transformed two years later into an intention to privatise south of the border--why on earth should not that happen in Scotland in 1994, and why cannot that be translated, as one Secretary of State cannot bind another, into something quite different in 1996 ? Opposition Members do not need a crystal ball to fear that the measure will facilitate privatisation. All we need to do is to look at the book south of the border.

It was also reasonable for Opposition Members to point out what the Prime Minister said in March 1993. That was before the consultation period on Scottish water, but it also showed clearly that the Prime Minister's own mind was that he was sympathetic to privatisation. The hon. Member for Renfrew, West and Inverclyde read a more recent quotation from The Courier and Advertiser , in which the Prime Minister said that no one ever says never in politics. Usually when people say never, they mean that certainly they will do it at some time in the future, but it would be too embarrassing to admit it now.

A more recent quotation comes from the magazine supplement of the Scottish Sunday Express last Sunday. Mr. Bruce Anderson, the biographer and, I understand, confidant of the Prime Minister, which makes him one of a small, select band at present, wrote an article advocating the privatisation of Scottish water.

Mr. Lang indicated dissent .

Mr. Salmond : The Secretary of State for Scotland shakes his head. That article appeared last Sunday.

Mr. Lang : I did not wish to put the hon. Gentleman off his stride. I wanted to indicate not that the journalist in question did not say that but that he was wrong.

Mr. Salmond : The journalist was wrong to advocate the privatisation of Scottish water. The point that I was making was that Mr. Anderson is rumoured to be close to the Prime Minister. He is certainly his biographer and I think that he is a confidant. Therefore, the Secretary of State cannot pretend to us that the privatisation launch has been eradicated from the Conservative Benches. Given that we have already explained that he cannot commit his successor or a future Parliament, what assurance do we have that privatisation will not rear its ugly head again when the political temperature is different ? The Secretary of State can give no assurance that will satisfy Opposition Members or Scottish public opinion.

I wish to deal with the Secretary of State's argument about efficiency. He said that his solution was the most efficient of the various permutations. It is more efficient than the privatisation option. There is huge disquiet south

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of the border about the efficiency of and public interest being served by privatised water companies. Only a few months ago, I received a letter from Thames Water informing me that, for the sum of £60, I could water my garden. I was surprised, as I live in a second-floor flat in Westminster. There is huge concern in all areas of England about the performance of private water companies. The Secretary of State said that his solution was the most efficient. Most Opposition Members would argue that the municipal way of managing Scottish water assets has proven itself, over more than a century, to be the most efficient way of handling those assets. Even if we agree that creating three water boards is an efficient solution, why should the Secretary of State appoint members of those boards ? Why should Secretary of State appointees be more efficient than people elected by local authorities and directly accountable to the people ? That is the acid test for democracy and autocracy. Regardless of whether the Secretary of State's appointees are excellent people, and even if he appoints some councillors, as he has said he is mindful to do, the proposal cannot be democratic. For example, if Councillor Brian Meek were appointed to one of the three water boards in Scotland--probably to all of them, given his track record of obtaining appointments--it would not make them democratic simply because he is one of the few remaining Conservative councillors in Scotland. The key to democracy is not who is appointed but who appoints. The only solution that would satisfy Opposition Members and the people of Scotland would be to allow that election to be by the democratic local authorities, which have a mandate directly from the people.

Will the Secretary of State consider his mandate, not just for the water proposals but for the whole Bill ? It is a subject that we have discussed many times in Scottish politics. I remember the Secretary of State arguing in 1979 that, although a majority voted in a referendum for devolution, it constituted only 33 per cent. of the total electorate, which was no mandate to proceed with substantial change.

By the same argument, this Bill was tested last Thursday before the jury of the Scottish people. The result was that less than 14 per cent. of them voted. But only 6.3 per cent. of the total electorate--one in 15 of the adult Scottish population--went to a polling place and cast a vote for the Secretary of State's proposals.

Mr. Bill Walker : The hon. Gentleman is wrong about a legal fact. He is making some interesting debating points but the referendum on the Scotland Bill was a legal measure brought about as a direct result of an Act of Parliament that was in place. Moreover, last week's vote was not under similar conditions, so the two cannot be compared.

Mr. Salmond : "Clutching at broken reeds" might be the best way to describe that intervention. The comparison that I made is reasonable. The Conservative party's argument in 1979 was that there was not a sufficient mandate to proceed because only a third of the population could be bothered to vote for that proposal, although it received the majority vote of those who voted. By comparison, a week past Thursday, the Conservative party managed to motivate and mobilise one in every 15 members of the Scottish population to go to a polling place and cast a vote for the proposals before us tonight.

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To put the matter another way, the Conservative vote in the Strathclyde region was 82,862 a week past Thursday. Compare that to the 1.2 million who voted against the proposals in the Strathclyde water referendum. I do not accept the nonsense that people did not understand, or were too silly to realise, what the measure was when they voted in that referendum.

During the local government campaign, I did a party trick at public meetings around the Strathclyde region. I would ask people to raise their hands if they had voted in the Strathclyde water ballot. The vast majority of people at those meetings raised their hands. I would ask them to put down their hands if they had not understood the question. Every hand at every public meeting stayed up. People knew exactly what they were voting on in that ballot and, by a massive number, they gave the thumbs down to the Government's proposals. 6.45 pm

The Secretary of State should therefore consider his mandate and look at the facts and figures with at least a degree of humility. He caused enormous offence in Scotland by parachuting five Conservatives from English constituencies on to the Standing Committee and by deciding each of the 102 Divisions by using those five Members. It will cause even greater offence in Scotland if the forecast of the hon. Member for Dundee, East (Mr. McAllion) comes true, as I suspect that it will, that people will pour out of the dark recesses of this place--hon. Members who have not even bothered to attend or listen to this debate--and once again the issue will be decided against Scottish interests.

The Secretary of State has already heard from the hon. Member for Linlithgow (Mr. Dalyell), who has been a far more consistent Unionist than him over the past 20 years of Scottish politics, of the repercussions and implications of the actions that he has taken on this Bill. It may be acceptable to the Secretary of State for Scotland to behave in that manner. It may even be acceptable to the empty Conservative Benches. It is not acceptable to the people of Scotland.

Mr. Connarty : I wish to set the record straight regarding some of the misinformation given to the Committee by the Minister responsible.

First, may I pass on, through his Front Bench, to the Under-Secretary of State, the hon. Member for Dumfries (Sir H. Monro), my best wishes to him and his wife. I hope that she gets better and that he is relieved of his troubles which prevent him from being here.

In Committee, the Minister consistently said that no alternative was put forward when the consultation took place on the Government's paper on securing a future for the water industry. But people wrote in, and Ministers kept quoting the Government's own summary of those responses to the consultation paper, which said :

"Most responses (84 per cent.) came from individuals. Preponderantly they expressed opposition to privatisation." The Minister consistently said that, as people did not give an alternative, no alternative was on the table to be discussed. We quoted back to the Minister and English Conservative Members from the same Government analysis of the submissions :

"Sixty-four per cent. of all respondents, and 67 per cent. of those opposing privatisation, preferred a solution which kept the services in local authority control".

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The Minister then gave the impression that only those who bothered to write a letter--4,834 letters were received--had troubled to suggest an alternative.

In an earlier parliamentary question, I asked for an analysis of all submissions. In fact, as is shown in page 7 of the summary, 60, 000 preprinted postcards were returned. With my hon. Friend the Member for Falkirk, West (Mr. Canavan), I delivered some 25,000 postcards signed in his constituency and mine. The rest came mainly from mid-Scotland, Fife and some constituencies in Strathclyde. People said quite specifically that they wanted water and sewerage services to remain under the direct control of elected councils. Despite that, the Government continued to misrepresent the position in Committee. That was very sad, as it enabled the Prime Minister to be deluded. Some people may say that the Prime Minister is easily deluded about many things. He stands at the Dispatch Box quoting from briefs that do not provide sufficient facts to enable him to deal with the subject at hand.

I put to the right hon. Gentleman a parliamentary question about what he thought of the results of the Strathclyde referendum. As these matters are on record, I shall not go into any detail. In reply, the Prime Minister said :

"Since Strathclyde wilfully misrepresented the Government's proposals"-- [ Official Report , 22 March 1994 ; Vol. 240, c. 131.] That was the Prime Minister's defence. It is quite clear that he had been briefed by the Secretary of State for Scotland or one of the right hon. Gentleman's ministerial colleagues.

I sent the Prime Minister a copy of the ballot paper, which says :

"Parliament is presently considering the proposals for the future of water. The Government proposes that from April 1996 water and sewerage services should be provided by a West of Scotland water authority, with a separate customers' council. The members of both bodies will be appointed by the Secretary of State."

A quango--or a "Lango"--would be appointed, and a "Lango" or a quango would be appointed to oversee it. The people of Strathclyde knew what they were voting on. They voted overwhelmingly not to make the Government do anything but to tell them that they did not want what was being proposed. That was the view of people throughout constituencies, regardless of political colour.

The party piece of the hon. Member for Banff and Buchan (Mr. Salmond)--as it was called by the hon. Member for Moray (Mrs. Ewing)--became a piece of street theatre. The Labour party leadership, my hon. Friends the Members for Hamilton (Mr. Robertson) and for Fife, Central (Mr. McLeish) and others went down to Eastwood. They took with them a letter, which people who had voted in the referendum were asked to read and sign. People of all political colours said that they had understood the process.

The letter says :

"We deeply resent being told by you"

"you" being the hon. Member for Eastwood (Mr. Stewart)

"and the Prime Minister that we did not understand the question that we had been asked or that we were misled by propaganda." Everyone queued up to sign. People told us that they had been lifelong Tories but they would not be Tories much longer. They had found the party out and realised that voting for representative democracy in respect of water and

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other local authority matters did not mean voting Conservative. They volunteered many other comments about the Government's misguided principles.

What is it all about ? It is about jobs for the boys--boys of the right political colour and creed. The Government will probably take a side step and appoint a few councillors, including--if the individuals in question are foolish enough to accept--a few of non-Conservative ilk. I hope that non-Conservatives who are offered positions will have the guts to say no, as they would not be representing anyone. This is all about what we have seen in England and Wales--the appointment of people who fit the bill. During the Standing Committee's deliberations, we were told to have a look at the Yorkshire Post . There we saw what Ofwat and Mr. Ian Byatt were up to in sacking people who did not take the right political line and in appointing friends, golf partners--this is rather like Mr. Peterken and the Secretary of State--old school chums and people known through previous employment, as well as the wives of individuals who had been Treasury colleagues.

Mrs. Helen Jackson : I wonder whether my hon. Friend has heard the disgraceful news that, despite the revelation that the Director General of Ofwat recognises expressly that his first duty is not to the customers but to the water industry, subject to the interests of the customers, and despite the fact that his performance in Yorkshire is such that he must have put his position in jeopardy, he was reappointed yesterday for a further two years. That ought to fill the Scottish people with fear as to what might happen if their interests were put in the hands of so-called regulators.

Mr. Connarty : My hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) is a great campaigner. In fact, she set up the all-party group on the water industry. It must be recognised that many people are worried about what is happening to the privatised water industry in England and Wales. Just as many people in Scotland are worried about the Government's long-term aim for the water industry there.

There is a financial agenda here. I refer to the £5 billion that the Secretary of State has said will be required over 15 years to bring water and sewerage services up to the standard required by the European Community. In Committee, it was agreed that £3 billion of that amount would come through the public sector borrowing requirement if the Government were to continue the present funding level of £340 million a year under PSBR.

The other £2 billion is already earmarked to be raised through capital finance through current revenue. In their submissions, many local authorities have said that they are capable of getting the £2 billion from the consumers, who are willing to pay in order to balance the accounts. The Government have not been able to demonstrate that I ought not to be worried that the Treasury will lower its PSBR target and that the £3 billion for water and sewerage services in Scotland will be withdrawn slowly but surely. Our concern is that we shall end up in the same situation as people in England and Wales, where 60 per cent. of all capital is provided from current revenue--in other words, through consumers' bills. In Scotland, the current figure is only 25 per cent. That is the Government's real agenda.

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They intend to mug the people of Scotland and make them provide the capital that is required to keep the services going.

My final message to the Tories is "Stop, thief. The people of Scotland know what you are up to." Maybe they are not thieves ; maybe they are water fascists--people who can take from Scots by passing laws in this Parliament. That is what water fascism is about. But the Tories will not succeed. The Scots will not allow them to succeed. We are not the mugs. This time, the Tories on the Government Front Bench are the mugs, and the people of Scotland will send them, with the hon. Member for Stirling (Mr. Forsyth)--and I should like to see them bald and tied to a mule--down south to seek seats after the next election. But, as last week's elections demonstrate, there are not many seats down here for Scots scurrying south in an attempt to secure their future. Perhaps it is time for the pipe and slippers. Redundancy is coming.

Mr. Henry McLeish (Fife, Central) : Most hon. Members are conscious of the rather sombre mood that pervades the Palace and the Chamber. None the less, this has been a very good debate. Points have been well intentioned, and we have highlighted what most people regard as one of the key scandals of Scottish politics--the Government's pursuit of changes in our water services when there is no public support for them.

What dismays Scots is that, despite the Strathclyde referendum, in which more than 1 million people said no to the Government's proposals, and despite the regional council elections, in which the Government were decimated on the ground and humiliated in spirit, Ministers are still hell- bent on pursuing the most unpopular policy to have been adopted in Scotland since the war.

Let me put it in context. Mine is probably one of the only Conservative- free local authority areas. In addition, it must be unique in Europe in having more Communist party seats that Conservative party seats. That is a measure of how this party of the past is being dealt with by Scots.

Tonight, there is a simple test for the Government. The Opposition do not have to be complicated about what they are trying to say. Our message is simple. First, we have argued that water should be retained in public ownership. The Opposition parties agreed to that, but the Government only grudgingly accepted--up to the next election.

Secondly, we have argued that the three super-quangos should be scrapped and replaced by 12 water authorities, which is essentially the status quo. Of course, we have argued that the members of all the 12 water boards should be councillors. Why do the Government not accept that ?

The Secretary of State, who must have been suspended from the real world, suggested that the Government have found the best solution in the circumstances, but no Opposition Member has heard a case to justify why it is the best solution. The simple test for the Secretary of State and the Minister is to tell Scotland loudly and clearly why they will not accept 12 boards comprising all councillors.

Of course there is a precedent for that, as my hon. Friend the Member for Hamilton (Mr. Robertson) said : they are doing it with police and fire services. This local government reorganisation is such a half-baked measure that we shall end up not with a single tier but a multi-tier. If it is good enough for the police and fire services, why is it not good enough for the future of Scotland's water industry ?

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