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Widdecombe, Ann

Wilkinson, John

Willetts, David

Wilshire, David

Winterton, Mrs Ann (Congleton)

Winterton, Nicholas (Macc'f'ld)

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Wolfson, Mark

Yeo, Tim

Young, Rt Hon Sir George

Tellers for the Noes: Mr. Timothy Wood and Dr. Liam Fox

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Question accordingly negatived.

Lords amendment No. 12 agreed to.

Subsequent Lords amendments agreed to.

Clause 64

General duties of Secretary of State and of new authorities

Lords amendment: No. 16, in page 56, line 33, leave out ("sewerage services") and insert

("facilities for the disposal of sewage")

Mr. Stewart: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): With this, it will be convenient to discuss also Lords amendments Nos. 17 to 24, 29, 56, 57, 92 to 104 and 121.

Mr. McAllion: I shall speak to Lords amendment No. 29, which seeks to introduce after clause 179 a new clause which would let the present regional and island councils use the new provisions in the Bill to facilitate the use in respect of their water and sewerage functions of what is called the Government's private finance initiative. [Interruption.]

The private finance initiative involves what are known as BOO schemes. BOO stands for " build, own, operate". That means that private companies are introduced to-- [Interruption.]

Mr. Deputy Speaker: Order. That is quite enough chatting in the House. I am finding great difficulty in hearing what the hon. Gentleman is saying. The House will now settle down.

Mr. McAllion: Some people have no respect for the Standing Orders of the House.

BOO schemes are where private companies are allowed to build, own and operate facilities which are essentially public facilities, and they are of course a matter of some controversy. There is the specific dispute over whether BOO schemes will lead to higher or lower prices for water consumers in Scotland. Last Wednesday, the Minister responsible for local government attacked Strathclyde regional council for making "alarmist claims" about the impact of BOO schemes on the price of water in Scotland.

The Minister argued that BOO schemes would be better for the consumer and denied the claims by the regional council that they would result in higher charges for Scottish consumers. At the weekend, on the television programme "Scottish Lobby", the Minister said that his Department had undertaken research into the impact of BOO schemes which invalidated the claims made by Strathclyde regional council in its original press release about the BOO schemes.

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Strathclyde regional councillors, as might have been expected, have reacted to the Minister's attacks, and they have provided me and other hon. Members--and, I suspect, Ministers as well--with an information note which responds to the Minister's attacks. The councillors have given a detailed breakdown of their assessment of what the impact of the schemes will be on the price of water in Scotland. Their assessment is that the impact will be wholly damaging to the consumers of Scottish water, and they suggest that BOO schemes will be twice as expensive as schemes where ownership remains in the control of regional councils, as they are at present, or public water authorities, as could happen in the future.

Strathclyde's case is open to scrutiny by all hon. Members, who can look at the detailed costings provided and make up their minds. Hon. Members cannot make up their minds about the claims made by the Government, because the Government have not made available to anyone outside the Scottish Office the detailed research which they claim to have carried out into the impact of the schemes on the price of water in Scotland.

It is time for the Minister to put up or shut up. He should respond to Strathclyde's case, which has been presented to him in detail, with an equivalent case of his own which goes into detail and challenges the figures given by Strathclyde. If he cannot provide that kind of detailed response, he should stop attacking the council and accept that its case is valid.

This is not just an argument about detailed financial costings and figures, because central to the Government's case is their belief that BOO schemes will, by involving the private sector, introduce competition which, in turn, will drive down the operating costs of providing water to consumers in Scotland. That case does not stand up to any scrutiny, because in England and Wales--where the Government have already introduced private ownership and competition into the supply of water and sewerage--costs have been driven up to the extent that water costs in England and Wales are now twice as much, and in some cases more than that, as in Scotland, where water remains in the public sector.

More worrying than the costs are the implications for safety and for safe standards in the supply of water and sewerage services in Scotland. How are the savings supposed to be achieved by the new private companies which come in to operate the schemes? I suggest to the Minister that the new private companies will be able to achieve those savings only by cutting corners and reducing safety standards in the delivery of vital services to Scottish consumers. That must be of concern to all hon. Members on both sides of the House, and the Minister should respond to that.

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Another concern that the Opposition have is about what might happen if the private operators who come in to operate schemes then go bust. Who will be left to pick up the tab--

Mr. Gallie: On a point of order, Mr. Deputy Speaker. We seem to be going back over the old arguments that we had in Committee, when in fact we should be addressing new clause 29--

Mr. Deputy Speaker: Order. The hon. Gentleman can safely leave that in the hands of the Chair.

Mr. McAllion: We are dealing with new clause 29, which deals with the private finance initiative introduced by the hon. Gentleman's own Government. If he does not understand that, we have to ask why he is sitting on the Back Benches in support of the Conservative Government.

Mr. George Robertson: He should be on the Front Bench.

Mr. McAllion: I notice that the Secretary of State for Scotland pales at the very thought.

The problem with the BOO schemes is that they link together in private control three vital strands of water and sewerage services in Scotland-- building, ownership and operation of the schemes. They will tie the hands of the new public authorities. The authorities will be tied into privately run schemes over which they will have little or no control. If things go badly wrong with the privately run schemes, there will be nothing much that the new public water authorities will be able to do about them, other than to intervene to bail them out and find extra public money with which to supply the services. The debate gives us the opportunity to clarify several issues. Strathclyde regional council has made the case that the introduction of the Government's private finance initiative into the supply of water and sewerage services in Scotland is likely to lead to higher costs for the consumers of those services. The council's case remains convincing and open to examination by anyone who cares to look at it. It is certainly detailed enough to persuade me and many other hon. Members with open minds that what the council says is correct. The Government's case remains shrouded in bluster and obfuscation, in both of which the Minister with responsibility for local government is expert. I suggest that even the lackeys on the Benches behind the Minister remain unconvinced by his bluster and obfuscation in this respect. There is now a clear opportunity for the Minister to come to the Dispatch Box to set the record straight and tell us the detailed research findings of his Department which justify his case. If he cannot do that, he should shut up and stop attacking Strathclyde regional council.

Mr. Salmond: As one of the more open-minded Members of the House, I want to make some observations about this group which, with respect to the hon. Member for Ayr (Mr. Gallie), involves not just new clause 29 but a wide range of amendments on the subject of water. I am particularly worried about amendments Nos. 17 to 23, all of which are similar in composition and all of which insert the word "former" into phrase which otherwise say:

"customers or potential customers of the new water and sewerage authorities."

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I want to know why the Government want to insert the word "former".

There may be an entirely innocent explanation for that insertion, but I shall make a few suggestions of the real reasons behind the amendments. If, for example, people were priced out of water services in Scotland by the sharp rises in prices that will inevitably take place following the creation of the water quangos, they would become former customers of the water quangos in Scotland.

I, too, saw what I can only describe as an unsatisfactory, indeed shifty, interview given by the Minister on that excellent programme, "Scottish Lobby", the other day. [Hon. Members:-- "Ah."] The producers and interviewers on "Scottish Lobby" will note the general assent to that description of the programme-- [Interruption.] Does the hon. Member for Paisley, South (Mr. McMaster) wish to intervene? Of course, he is a Whip, so he is not allowed to say anything. Even on the Opposition Front Bench there is general assent for the description of "Scottish Lobby" as an excellent programme. Only this weekend it exposed the charade behind the Minister's bluster that there will not be sharp rises in water prices. The Minister looks somewhat surprised. He often looks surprised during debates. I cannot quote exactly from the programme, but as I remember it, the interview ran roughly as follows. The interviewer asked the Minister whether he had made any forecasts of the rises in water charges in Scotland. The Minister said yes, he had. The interviewer asked what they were. The Minister then said, "You surely don't expect me to tell you that." Mr. Stewart indicated dissent .

Mr. Salmond: The Minister shakes his head. Will he now say what those sharp rises in cost will be? He expressed confidence that his departmental officials had researched the matter carefully, until he was asked what the rises would be. He then refused to forecast them, looked accusingly at his interviewer and said, "You surely don't expect me to tell you that." The Scottish people do expect to be told what the forecasts are.

There can be little confidence in the Government's position on this. We need think back only a couple of years to the poll tax fiasco, when the Government confidently forecast the expected price rises, and their forecasts were wrong in almost every case that came to light. On this further lunatic measure, the Government are not even prepared to make forecasts in the first place. No one who watched that interview can feel confident that the Minister has any idea of the price rises that he is letting the Scottish people in for. We are therefore entitled to be extremely suspicious about the insertion of the word "former" into the relevant clauses and I have a mind to divide the House on amendment No. 17.

10.45 pm

Another sinister reason why the word "former" might be introduced is that someone could become a former customer of the water quangos if those quangos cease to exist. The Minister again looks surprised, but he must

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know that many Opposition Members see something familiar in the progression of water out of local government control into quangos and then, as happened south of the border, into the private sector. The Scottish people suspect that water quangos are merely a staging post for the Government's eventual aim of taking water into the private sector in Scotland, just as he did south of the border. If that were the Government's aim, the Bill would provide for it by describing people as "former" customers of quangos, which would then no longer exist.

I am also naturally suspicious of allowing amendments to go uncommented on when I doubt whether any hon. Member, least of all the Minister, understands them. I am interested in amendment No. 16. There seems to be a significant difference between "sewerage services", the phrase currently in the Bill, and

"facilities for the disposal of sewage",

which the Government intend to put in the Bill. I hope that the Minister will explain exactly what the difference is.

I am also concerned about amendment No. 24, which I have now read several times with the relevant clause and find absolutely and utterly incomprehensible. The amendment and clause say:

"in a case where the proposed sewer will connect with their sewers or sewage treatment works, determine (and by written notice advise the person) that all, or a part which they shall specify in the notice, of the sewer constructed shall not vest in them through the operation of section 16(1)(c) of this Act;"--

the amendment then inserts:

"and shall instead vest in him"--

and the clause goes on:

"but notwithstanding the determination the sewerage authority may, on such terms and conditions as they think fit, then or at some later time enter into an agreement under which the sewer, or as the case may be the part, shall vest in them."

Even in terms of complex legislation, that amendment makes an already incomprehensible clause even more incomprehensible. It might be seen as a case of them and him, but I expect the Minister to offer the House some explanation of what amendment No. 24 means. This is a critical part of the legislative process in this House. We are a couple of days away from the end of the Session. I know that Lords amendments are not subject to a guillotine and that the Government want to progress other important legislation before the evening has ended. They also have a privilege resolution tomorrow in which some Members have expressed an interest. Nevertheless, that is no reason for allowing the ambiguous, inconsistent, and perhaps even sinister, amendments before us to be passed without opposition. This would be the perfect opportunity for the hon. Member for Hamilton (Mr. Robertson) to show the drive and enthusiasm that he showed as recently as last December in forecasting that the Bill would be bogged down, defeated and sent into oblivion. If we had more of that guts and gumption in discussing the Lords amendments today, the Government might have an impression of the strength of feeling that undoubtedly exists in Scotland about the course of the legislation. If the Government are vulnerable at any point in the legislative process, it is now. I suggest that Opposition Members take advantage of that opportunity.

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