11 November 2010

Statement: Scottish Water Bill

Scottish Parliament

Thursday 11 November 2010

[The Presiding Officer opened the meeting at 09:15]
... ... ...
Scottish Water Bill

The Deputy Presiding Officer (Alasdair Morgan): The next item of business is a statement by Stewart Stevenson on the proposed Scottish Water bill. The minister will take questions at the end of his statement, so there should be no interventions or interruptions.


The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):

Water is one the most abundant resources on the planet. It is also one that, through its ubiquity in Scotland, its being almost constantly in our vision and its easy availability from our taps, we Scots often take for granted. However, the idea of water's ubiquity and its easy availability to all is false. For many in the world, it is a vital commodity in desperately short supply. As available water resources become stretched, the value of water, both economically and in humanitarian terms, becomes greater. According to the United Nations, there is enough fresh water on the planet, but it is distributed unevenly and too much of it is wasted, polluted and managed unsustainably. We take water for granted but disregard it at our peril.

It may not always feel like it, but Scotland is a lucky country. It is blessed by an inventive and inquisitive people, resource-rich land and sea and easy access to what the world is increasingly recognising as the next great asset—water. One of the tests for us in the future will be how we care for and use that great asset. Our Victorian predecessors, in particular, exercised clever stewardship and innovation, building drinking water and sewerage infrastructure for Scotland's people and helping to drive cholera out of our cities. To this day, we benefit from their investment, their foresight and their efforts. Scottish Water is the embodiment of that. For less than £1 a day, the average household gets wholesome water and has its waste removed and treated.

Our water is a public asset, and we are committed to ensuring that it is managed and exploited for the public good in a public agency. I believe that a majority of members continue to believe in that. Our first purpose in looking at how we should discharge our water responsibilities is to maintain that link between public asset and public good. Has our public body, Scottish Water, done well? Yes, it has. It has been the fastest-improving water company in the United Kingdom and continues on an improvement path. It delivers excellent-value services while improving quality and customer service. Customer bills are stable.

Can Scottish Water do more? Yes, it can. Scottish Water is Scotland's biggest purchaser of electricity, and there is considerable potential in its asset base to develop wind, hydro and micro-hydro power generation to the extent that all its electricity needs could be met and further amounts of electricity could be generated and exported to the grid. There is also considerable potential to develop redundant assets, such as disused sewage treatment works, into modern waste recycling facilities that support Scotland's drive to become a zero waste society. Scottish Water also holds a great deal of water knowledge and experience, which it could use to become part of a centre for the sustainable exploitation of water. We should aspire to lead the world in that.

We are confident that there are significant commercial opportunities in each of those areas—and there is more. Let us look at areas that are not so overtly commercial. Our people want to help when international disasters strike. Water is often the instrument of disaster, the carrier of disease or the cause of drought. We should aspire to a situation in which Scottish expertise and practical help can make a bigger difference.

The vision that was painted by the First Minister in his statement in September on the programme for government described an evolution for Scottish Water, not a revolution. He promised that we would bring forward legislation to enable Scottish Water to play a wider role. It is usual, as part of such a process, for discussions to take place between the Scottish Government and the parliamentary authorities about various matters relating to draft legislation.

It is true that we originally believed that we could start the move of Scottish Water into a broader role with a very limited bill. However, as we reflected further on our vision for Scottish Water, it became clear that we were at risk of underestimating the potential. Our proposals for legislation might be seen as being too limited and as not providing a sufficient basis for the continuing development of Scottish Water's role.

We can also be more imaginative in thinking about how Scottish Water could develop a role in key areas of public concern at home. For example, Scottish Water already has a close relationship with local authorities. Its retail arm, Business Stream, works with them to help them to reduce water use and therefore save money on their bills. That is only a beginning.

Scottish Water also has extensive experience in procuring large-scale capital projects. Could we find a way to use that experience more widely? Perhaps local authorities could draw on that expertise when procuring flood protection schemes and other flood management work, which would ensure the best use of public funds by taking a shared service approach.

Canals are important assets that we are retaining in the public sector in Scotland. We should be asking ourselves what opportunities there are for creating additional public benefit from all our water infrastructure, both inland and maritime.

On top of all of that, however, is the fact that water is global. It respects no borders. Climate change brings droughts to previously wet areas and floods to places that are not used to flooding. Water's ever-changing journey across the planet means that the issues are international and the solutions are global. As water supply becomes less predictable, so its importance to the economy and society becomes more obvious. There is an old adage that nobody worries about the well until it is empty. As the world begins to worry about the well, so our vision needs to be international.

Those are among the important questions that we need to examine more fully. Given the extent of the proposals, it would be wrong if we did not have a full consultation phase. Many people will have views and ideas, and I am sure that they will add to the menu that I have described today. It is important that they are heard.

We have identified some areas of uncertainty, which could be material. Significant among those are the UK Government's decision to move British Waterways in England and Wales to the third sector, and the forthcoming Scottish bill's approach to borrowing powers.

Present legislation is highly complex and is based on Scottish Water undertaking a limited set of functions. We need to ensure that that framework—its regulation, financing, corporate structure and interaction with ministers—is robust enough to deal with the wider possibilities that we have begun to identify.

We therefore decided last week that the present limited provisions should be withdrawn, and I wrote to Patrick Harvie, the convener of the Transport, Infrastructure and Climate Change Committee, to explain that and to set out our plan to consult on proposals for legislation that is more wide ranging than was initially planned.

Later this month, it will be my pleasure to deliver on that promise when we bring forward draft proposals as part of an ambitious consultation on Scottish Water's future. I am sure that colleagues in all parties will welcome our commitment to consult on these important matters.

In setting out that there should be a water bill, the First Minister spoke about developing a legacy for future generations and said that making the best use of our precious water resources is a long-term strategy. I agree with his words, and I think that, when we discuss such a vital part of our economy, our environment and our society, we should do so in a constructive fashion.

When we talk about water, we talk about our future. It underpins much of what we do. This chamber should beware of starting a storm in a water cup, if the price of that is to block our ears and close our eyes to the important business of mapping a future for our most precious resource.

Stewart Stevenson
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