§ Mr. Eric Clarke (Midlothian)Are hon. Members aware that nuns in enclosed orders of Catholic convents get up at 3 o'clock in the morning? They get up to pray for mankind, because they think that many sins are committed at that time. I am not ridiculing that; I think it is an admirable thing for nuns to do. The only sin is that we are complying with the nonsense by coming to the House at this time of the morning. I would like to see the House reformed—I am a new boy—and I hope that any reform in Scotland will include the establishment of a Parliament in Scotland.
The Government's local reform in Scotland is preparing the way to remove from public democratically elected representatives—the councillors—their fundamental basic major responsibilities. Water and drainage are to be privatised. Responsibility for the police, fire services, education and social work are to be given to boards appointed by the Government—more quangos. [Interruption.] Yes, it is on the cards. We will have a one-tier authority with new powers, run by Tory hacks and under Tory control. In other words, we will have glorified part-time councillors appointed by the Government.
Once again, power will be centralised, and the Secretary of State for Scotland will not be answerable. He will not be answerable to a Scottish Parliament. He will riot be answerable in a referendum on major constitutional changes such as local government reform or the privatisation of water, drainage and sewerage. Instead, we shall merely have a phoney consultative document.
The alternative would be to make savings for the people. If there was no reform of local government, savings would be made in democracy, or what little is left of it. A Scottish Parliament would be the forum to reform local government. Many authorities or important quangos could be made accountable to elected Members, not simply to the Secretary of State.
The will of the people of Scotland is obvious to all of us, but not to the Government. The discussion document produced by the Government on proposals for water and sewerage in Scotland cost £50,000, and it is a sham. Research into the state of Scotland's water shows that its debt for water and sewerage is £1.2 billion. That is money which the authorities were allowed to borrow. We accept that the authorities need to update and reinvest in Scottish water and sewerage. However, the concept that privatising water and sewerage will save taxpayers' money is a total fraud.
In England and Wales, a debt of £5.028 billion was written off using taxpayers' money. The taxpayers paid £160 million for consultants and others to float the assets. Cash handouts to the tune of £1.572 billion were given to private companies. A secret deal between the Treasury and the water chairman ensured that none of the 10 water companies would pay corporation tax for the next 17 years. That was a bonanza of at least £2 billion to the new companies.
Assets worth £34.5 billion were sold for an income of £3.594 billion; £233 million-worth of property assets and recreational grounds were given away, with no clawback for the taxpayer. Some savings! The customers now pay and the taxpayers are the losers.
I give the House a quote: 194
We concluded that there was no case at present for a similar move in Scotland…I confirm we have no plans to privatise water services in Scotland."—[Official Report, 21 March 1989; Vol. 149, c. 949.]That was said by the Under-Secretary of State for Scotland. Does the Minister want to comment on that?We have obtained comparative information from the House of Commons Library. I ask the House to bear with me. The cost of water supplies per head is £25 in Scotland and £35 in England and Wales. Scotland is better off by 40 per cent. Water supply per kilometre is £2,787 in Scotland, compared with £5,531 in England and Wales. Scotland is better off by 99 per cent.
Sewerage charges per head are £18 in Scotland compared with £24 in England and Wales. Scotland is 33 per cent. better off. Sewerage costs per kilometre were £3,217 in Scotland and £3,984 in England and Wales. Scotland is 24 per cent. better off. In 1987–88, the industry in Scotland employed 6,237 people. In 1991, there were 6,222 employees.
The benefits of privatisation are for the few. Company chairmen have received wage increases of up to 267 per cent.—that is the highest increase, for the chairman of Southern Water. Such chairmen have rightly been called water millionaires in the press. Chairmen have received share options. The chairman of North-West Water took up an option of 225,524 shares. Water companies have gone into property development. They have moved into the management of hotel sports complexes. The priority in such realms is not water supplies. Of course, the benefits to the consultants who worked on behalf of the Government are obvious.
The disadvantages are for the many. The cost to users of water will increase. They have increased on average by 50 per cent. in England and Wales since privatisation. Jobs have been lost. There is less emergency cover. The average water loss is 20 per cent. There is inadequate investment in safety. According to a recent analysis, the quality of water in Scotland is better than the average for England and Wales.
The water companies have increased charges for the use of reservoirs and so on, with no concessions for the unemployed and old-age pensioners. In Lothian and other areas, such concessions are available. There is lack of public access to some of the most beautiful parts of our land. There will be more disconnections because people cannot afford to pay the high price of the reality—
§ Mr. Jimmy Wray (Glasgow, Provan)Does my hon. Friend agree that, since water privatisation in England and Wales, about 50,000 people have had their water cut off? In one area, one in seven households have been cut off. Does he also agree that Strathclyde does not get one penny from the Government, although the Secretary of State for Scotland has said that about £237 million has been paid to Scottish water and sewerage authorities? They borrow the money. They borrowed £83 million under section 94 of the Water Act 1973. There is a debt of £418 million for water and sewerage, which is costing the taxpayer about £66 million per year.
The Minister knows that no one in Scotland wants water privatisation. If he wants to do something, why does he not ask the Government to do the same for Scotland as they did for England and Wales, and wipe out the £5,000 million debt, giving it a green dowry? Why do we not get that for Scotland, so that we can bring water up to the standard required by the European Community?
§ Mr. ClarkeNo one in Scotland—with the exception of Scottish Ministers—wants privatisation of water, drainage and sewerage. We hit the streets of Midlothian with our pamphlets and petitions. The public reception was one of total opposition to privatisation. Even the most cynical members of our community were moved to sign, and gladly supported our efforts. I am sure that that is reflected throughout Scotland.
The management and protection of that natural asset and essential service is in good, capable hands in Scotland. The water and drainage committees of the regional councils and the highlands and islands authorities provide a first-class service. Many of the authorities inherited assets from our long-sighted forefathers, and many of them were Conservative-controlled councils. Money to modernise can be borrowed and paid back efficiently without privatisation or the need to destroy a major industry or the organisations concerned.
Anglers, sporting people and those employed in the industry, as well as the people of Scotland, will not stand by and allow it to pass into private hands without a fight. The Labour party has declared war on the tap tax. The popularity of the Conservatives is at its lowest level. Even Tory councillors and other Tory supporters are involved with us in the anti-privatisation battle.
The Government's role is to listen to and accept the will of the people. Scotland is saying no to the privatisation of water and sewerage, to the reorganisation of local government and to the Government's proposals. Above all, they are saying yes to a Scottish Parliament. If we had such a Parliament, we would not have so little time to discuss essential services, and the backbone of the Scottish economy, or have to discuss them at a quarter to four in the morning. We would have the opportunity to debate the matter and make an in-depth input to the discussion.
I shall end there, because I think that some of my colleagues wish to speak. Many of them are here, and there would have been many more if the Scottish Grand Committee, which is also an essential part of our role, had not been sitting this morning. Few Conservative Members were elected to Scottish seats, and there are few of them here, with the exception of the Minister. It would have done them the world of good to come here and listen to what we have to say.
§ Mr. John McAllion (Dundee, East)I thank my hon. Friend the Member for Midlothian (Mr. Clarke) for securing this important debate. I do not wish to exaggerate the importance of what will happen in the next one and a half hours or to suggest that all of Scotland is agog with anticipation of what hon. Members present this morning have to say. My hon. Friend the Member for Knowsley, North (Mr. Howarth) can certainly not be described as being agog with anticipation at the progress of the debate.
It is symbolic that the Westminster Parliament finds time to debate a matter so critical to Scots in the middle of the night when 99 per cent. of its Members are absent and in bed, most of them blissfully unaware that the subject is being debated. In those circumstances, the clear message is that if Scotland wants Scottish political issues to be treated seriously it must first remove those issues from the responsibility of this House and transfer them to a Scottish Parliament which will be established in our own country in the very near future.
196 In his foreword to the consultation paper on the future of water services in Scotland, the Secretary of State for Scotland said:
The Government will reach a decision on the right way forward in the light of responses to this consultation paper.If one takes that sentence at face value, one could be forgiven for believing that if the overwhelming majority of responses to the consultation paper were opposed to privatisation, the Government would simply accept the Scottish people's opposition to privatisation and drop their plans to privatise water services. However, when the Secretary of State made a statement to the House on the future of water and sewerage in Scotland and was pressed by my hon. Friend the Member for Paisley, North (Mrs. Adams) as to whether he would accept the results of the consultation, he replied:I will accept the findings of a general consultation, but I shall assess the strengths and merits of the arguments that are advanced."—[Official Report, 17 November 1992; Vol. 214, c. 157.]An important distinction has to be made. The Secretary of State said that he would assess the strengths of the arguments, which means that if 1,000 or 100,000 or 1 million Scots respond to the consultation by saying that they oppose privatisation of water but the Secretary of State does not like their arguments, he will simply dismiss their response, but if only 10 or 20 Scots say that they are in favour of privatisation and the Secretary of State likes their arguments, he will give more weight to those 10 or 20 responses than to the million responses opposing privatisation.That fact was confirmed when my hon. Friend the Member for Cunninghame, South (Mr. Donohoe) pressed the Secretary of State further and reminded him of the precedent of the hospital opt-outs in Aberdeen and Ayrshire before the last general election. Again, the Secretary of State replied:
As with the hospital trust consultation period, I will assess the arguments advanced and reach a decision with my colleagues on the basis of those arguments."—[Official Report, 17 November 1992; Vol. 214, c. 161.]You, Madam Deputy Speaker, may not remember the response to the consultation process on hospital opt-outs in Scotland, but between 80 and 90 per cent. of those who responded opposed the opt-outs. Yet they were simply dismissed by the Government, who went ahead anyway because they were not prepared to accept the arguments put forward. If anyone in Scotland expects this consultation process to be open-minded or democratic in any sense, he can forget it because the mind of the Secretary of State for Scotland has already been made up, as has the Government's mind, because they are intent on privatising water services in Scotland.All kinds of evidence supports the case that I am putting forward. Everyone recognises that a huge investment is needed in the water industry over the next 10 years. Both sides of the argument agree that some £5,000 million must be found to invest in water services over the next decade. If that money is to be found from within the public purse, the Secretary of State will have to find it from the money allocated to him by the expenditure system under the Westminster Parliament. The Secretary of State's block grant is allocated on a formula which determines Scotland's share of the equivalent spending in England and Wales. Until this year, Scotland used to receive about 11.76 per cent. of equivalent spending. It is important to remember that there is no equivalent 197 spending in England and Wales on water and sewerage as those services have already been privatised in those countries.
Therefore, if the Secretary of State is to find the £5,000 million in the next 10 years—£500 million for each of those 10 years—he will have to negotiate that sum directly from the Chancellor of the Exchequer. The chance of the Secretary of State for Scotland negotiating with the present Chancellor an additional £500 million of public spending to dedicate to water and sewerage in Scotland is absolutely nil. In a recent public spending round, the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart), boasted with other Scottish Office Ministers that they had successfully negotiated an extra £340 million over the next three years. That is about £100 million for each year to spend on housing, roads, transport, schools, the health service and all the public sector spending requirements in Scotland. If they regard that negotiation as a great success, how on earth can they realistically say to anyone in Scotland that they are seriously considering winning an extra £500 million for every one of the next 10 years to spend entirely on water and sewerage services in Scotland?
§ Mrs. Irene Adams (Paisley, North)Is the Minister aware that that amount of money was almost exactly the amount that Renfrew district council found that it would need to bring its council housing stock up to a tolerable standard over the next five years? The amount that Ministers boasted of winning for Scotland would have served to save and bring up to a tolerable standard only the council's present houses.
§ Mr. McAllionMy hon. Friend makes a fair point. The reality is that the Government are simply not prepared to find the money required to invest in public services in Scotland. They are certainly not prepared to invest in the water and sewerage services in Scotland. They have already made up their minds that, if that money is to be found over the next 10 years, it will have to come from private sector investment in the water and sewerage industries.
The Secretary of State for Scotland claims that the consultation domcument contains eight different options for the future of water and sewerage in Scotland, six of which are in the public sector and only two in the private sector. But only the two in the private sector are being seriously considered by the Government because of their desire to attract private investment into the water and sewerage industries in Scotland. Those two private sector options are outright privatisation on the model of the English and Welsh water companies or franchising by contracting out the water services to private companies.
It does not matter what anyone in Scotland says or thinks, because the Government have already made up their minds. If money has to be found on such a scale, it will be found by attracting private sector investment and selling the water industry in Scotland to the private sector.
§ Mr. WrayDoes my hon. Friend agree that the Government have no intention of providing the £5,000 million that is needed? They want to do the same as they have in England and sell all the assets of the water companies and the local authorities. They want to sell the 365,000 acres of land. There have been 10,000 complaints to the Office of Water Services about water disconnections.
§ Mr. McAllionMy hon. Friend makes a fair point. If the private sector is to invest in the water industry, it will do so at a price, which will be the profits that the private sector is able to extract from the water industry or, to be more exact, from those who pay for the industry—the consumers.
§ Mr. Gordon McMaster (Paisley, South)My hon. Friend the Member for Midlothian (Mr. Clarke) referred to privatised companies awarding their chairmen rises of 267 per cent. Did it occur to my hon. Friend the Member for Dundee, East (Mr. McAllion) that, in the House only two weeks ago, we voted on whether or not to allow the public sector—where Scottish water employees currently work—a rise of only 1.5 per cent? Whatever that vote was made out to be, that was what it was about.
§ Mr. McAllionMy hon. Friend is right. This Minister voted to restrict low-paid workers in the public sector to a 1.5 per cent. pay increase, but he has patted on the back bosses awarding themselves huge pay increases at the expense of water consumers.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)Does the hon. Gentleman approve of Strathclyde's recent decision to increase the salary of its director of water services by 20.9 per cent.?
§ Mr. McAllionI do not support that decision; I would never support a decision of that kind, the more so since it involved a much larger increase than that paid to the low-paid people who work for Strathclyde region.
What will this decision mean for the ordinary people of my area? First, it will mean that the price of water will rise for consumers in Scotland. In their consultation document, the Government provide figures for the average cost per household of supplying water and sewerage services in Tayside over the past three years. It works out at £94. Recent figures published in The Observer show that the average cost per household in England and Wales under the privatised system is £169, which is £75, or 80 per cent., higher than in Tayside. The comparable figure in Anglia is £227 per household, and in South-West it is £228. That is more than £130, or 140 per cent., more expensive than in Tayside. It is therefore easy to see what the result of privatising water services in Scotland will be. It will be to push up the price to the consumer of a service which will not be so good as the one provided by the public sector.
The great gulf between the prices charged by the two sectors is no accident. The regional councils are allowed to borrow money from the public sector at rates much lower than those commercially available to the private water companies. It costs the private companies more to borrow than it does the public water authorities. That means that the former pay higher loan charges than the public sector bodies, and the resulting higher water charges are inevitably passed on to the consumers. Above all, private water companies have to make profits and pay out dividends to their shareholders.
My hon. Friends have rightly drawn attention to the fact that all this will not relieve pressure on the public purse. In England and Wales, the Government wrote off £5.5 billion of capital debt at the time of water privatisation, and gave the private water companies a further green dowry of £1.5 billion. They also introduced tax allowances running into the next century which will be worth a total of £7.7 billion. In all, more than £14 billion 199 of public money was tied up in the privatisation of the water industry in England and Wales. In return, the public purse got only £3.5 billion from the sale—a net—loss of £10.9 billion.
I do not underestimate the scale of the investment required in the water industry in Scotland over the next 10 years, but it is dwarfed by the public handouts that the Government have given to the private water companies in England and Wales. If Scotland could have less than half that sum, we should have no problem meeting the investment requirements of the industry in Scotland.
There will be consequences far more serious even than the financial ones. A book called "The Dundee Source Book of Scottish History" takes us back to the situation in Dundee before we had public water authorities. It describes what things used to be like before the water industry was brought into public ownership and massively improved. My first extract comes from a poem written by Thomas Hood about Dundee in 1815. It reads:
The town is ill-built and is dirty besides"——much has changed since then—The people of Dundee are not "very deficient in noses", but that extract points out that the city's crude water supply at that time made Dundee dirty and smelly.
- "For with water it's scantily, badly supplied.
- By wells, where the servants, in filling their pails, Stand for hours, spreading scandal, and falsehood, and tales.
- And abounds so in smells that a stranger supposes
- The people are very deficient in noses."
On the same page is a list of the causes of death in Dundee in 1833. Cholera stands out, with 137 deaths, and dysentery, with 15 deaths. Fevers, including typhoid, caused the deaths of 132 people. The lack of a clean water supply to the city caused more than 200 deaths that year. The elimination of typhoid and cholera is largely thanks to work undertaken by the public sector in the years since then—by corporations, town councils, county councils, water boards, and regional councils. Their work has been one of the great successes of the second half of the 19th century and of the 20th century—and it is all to be put at risk because of the Government's determination to privatise Scotland's water industry.
The Minister laughs, but I remind him that in Scotland it is currently illegal to disconnect a domestic water supply other than for technical reasons. It is illegal because in Scotland it is recognised as barbaric deliberately to put people's health at risk for private profit. We now run the risk of seeing the reintroduction into our communities of typhoid, dysentery and other diseases which were eliminated many years ago with the introduction of proper public water supplies.
When he made his statement to the House on 17 November, the Secretary of State for Scotland was pressed again and again to say whether he would change the law to provide for the disconnection of water supplies to domestic consumers. He answered:
Disconnections are not legal in Scotland; they have been legal in England before and after privatisation. We shall address Scottish circumstances in accordance with special Scottish needs.That did not satisfy hon. Members representing Scottish constituencies. When pressed again, the Secretary of State stated:"There is no legal consent available to disconnect water in Scotland. I have no plans to make any change in that. I shall 200 be considering the range of options in the light of the submissions in the consultation paper, but at present that does not arise.Pressed once again, the Secretary of State replied:I have already said that I have no plans for disconnection but, clearly, the future structure of the water industry must be decided and, in due course, when one of the eight options—or one of the variants of those options—laid down in the consultation paper has been decided upon, the other factors relevant to that option will also have to be decided.Theother factors relevant to that optioninclude the disconnection of domestic supplies. My hon. Friend the Member for East Lothian (Mr. Home Robertson) put it to the Secretary of State thatthe only way in which the privatisation of water services in Scotland can possibly work is if powers to disconnect domestic premises are introduced".The Secretary of State replied:That is not an issue that I have yet addressed. The time at which to address it will be the time at which we decide on a particular option that might make it necessary."—[Official Report, 17 November 1992; Vol. 214, c. 155–61.]Theparticular option that might make it necessaryis the privatisation of the water industry. The reality is that the Government intend to privatise the water industry and, once they have done that, to change the law in Scotland to allow for disconnections—and to put at risk all the medical advances made in our country over the past 100 years.Since privatisation in England and Wales, there have been 50,000 domestic disconnections. Between April and September, domestic disconnections increased—exactly contrary to the comments made by the Secretary of State for Scotland in his statement on 17 November. What will people do when their water and sewerage services are cut off and they cannot afford reconnection? If they take water from the streams, but use the same streams as lavatories, we risk seeing the reintroduction into our communities of diseases unheard of in our country for many a long year. That is the risk that the Minister and his like are now running. That is completely unacceptable to the people of Scotland and we shall do whatever is necessary to stop the Minister and the Government from proceeding with their proposals.
§ 4.9 am
§ Mr. George Galloway (Glasgow, Hillhead)I note the mirth on the Conservative Bench. I say "Bench" rather than "Benches" because I think that the public, when they read the report of our debate, should understand that behind the Minister and his lackey are rolling acres of green leather: not a single Scottish Conservative has turned up to defend the Government on this vital issue.
My hon. Friend the Member for Dundee, East (Mr. McAllion) spoke of the history of urban Scotland before the days of municipalised water—a time of more enlightened men than the Minister, although they may have been of the same political stripe in terms of their attitude to capitalism. The Minister simply cannot understand that Opposition Members—speaking for far more than the 75 per cent. of electors who voted for the Opposition parties in Scotland at the general election—believe that there is something morally wrong with the proposal to hand over the water that God gave the Scottish people in abundance to any cheap speculator who will put his equity into Scottish water in the hope of making a profit.
201 The Minister seems not to grasp that there will be no other reason for speculators to do that. The city fathers—they were all fathers then—who decided to standardise and municipalise Scottish water supplies did so because they knew that, if left to naked market forces, that would not be done. They knew that the great epidemics to which my hon. Friend referred would become the norm, that the health of the work force would deteriorate and that that work force would not be able to produce the profits that the entrepreneurs wanted. Enlightened self-interest made them go along with standardisation, and led them to make the necessary investments through public expenditure. If it was true then that water could not safely be left to market forces, surely it follows that it is at best dodgy to contemplate returning it to market forces now. Surely even the Minister can understand the logic of that.
My old grandfather used to say that if the Tories could bottle the air that we breathe, they would give us masks and oxygen bottles with a coin slot and a meter so that we could pay for the very means of sustaining life. I used to laugh at that, thinking it an example of my grandfather's extremism: he was even more left wing than I am. But it is not so very far fetched, is it? Today, the Government are seriously contemplating taking the rain that God sends—the Minister laughs, but I doubt that he laughs at the idea of God on Sunday mornings; he probably goes along with the concept then.
Who, if not God, sends the rain from the skies? Yet the Minister proposes to change that rain into just another commodity. Perhaps he—right down to his mutton-chop sideboards knows the price of everything and the value of nothing. He knows the price that water will fetch on the market, the price of the bribes—dowries of all kinds—that he will stuff down the throats of the speculators, and the price that water will fetch in profits over the years for the speculators who steal it from us. The Minister appears to find those moral points funny. He should be aware, however, that the Government's minuscule support in Scotland is in grave danger of disappearing altogether if they proceed with their proposal to steal Scotland's water.
The Minister knows my constituency and knows that its socio-economic composition is such that, were it in many parts of England, it would undoubtedly be a Conservative constituency. My hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) represents a similar constituency. Yet in both my hon. Friend's constituency and in mine, people are queuing, and I mean queuing, in the street for 10 minutes or more at a time to append their signatures to petitions protesting at this larceny against the Scottish people—this offence against everything decent that has been built up in Scotland over centuries. Many of them are the kind of people whom, in times gone by, the Minister would have expected to support the Conservative party, and who he—supreme optimist that he is—must surely hope will one day return to the fold.
I warn the Minister: there is no support for the proposals, even among the 25 per cent. minority in Scotland who support the Conservative party. The Government proceed with the proposals at their peril The House may say, "Why don't we sit back and let them do it?" We cannot do that because too much is at stake. In the hands of the barbarians who will buy it, our water cannot he depended upon. We cannot trust them; our water 202 cannot be safe in their hands. That is our contention, and it is a contention shared by many more people than voted for us on 9 April.
The question of a mandate goes to the heart of the matter. When my hon. Friend the Member for Dundee, East was referring to the number of times that the Secretary of State had said that he had no plans to change the law in Scotland to allow the disconnection of private water supplies, did it not strike the Minister that that is exactly what his colleague the Under-Secretary, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), said on 21 March 1989—that the Government had "no plans" to privatise Scottish water? Does the Minister feel no moral qualms about the fact that, just a few months ago, he fought an election in Scotland denying that the Government had any plans to privatise Scottish water? The hon. Gentleman is shaking his head: clearly, he has no moral qualms. Perhaps it was naive of me to expect that he had.
It must strike the Scottish people as an offence against anything that could be called democracy that a Government seeking re-election should hide their enormously important and controversial intention—the Minister will concede that it is controversial, at least—to steal our water from us and should fail to put their proposal to the electoral test. At the general election, the number of Scottish Conservative Members increased from the nefarious nine to the embarrassing 11 who face us across the Chamber, when they can be bothered to muster here. Had the Government told the Scottish people the truth, which was that they intended to embark on a course that would lead to the privatisation of Scottish water, their ranks—had they been large enough, which they were not—would have been decimated. They lied their way back into the House by failing to acknowledge—
§ Madam Deputy Speaker (Dame Janet Fookes)Order. That is not an acceptable expression, as I am sure the hon. Gentleman knows.
§ Mr. GallowayI am not suggesting that any hon. Member is lying in the House, but, collectively, the Conservative party in Scotland lied its way through the general election by omission, by refusing to acknowledge its plans to privatise Scottish water. It is impossible to withdraw that contention, for I feel it in my bones. It is an allegation, not specifically about the conduct of any hon. Member but about the whole Conservative party.
I am running short of time, but I wish to conclude on a point that is not shared by every section of my party. Two Fridays ago, I was going house-to-house in Earl street in Scotstoun in my constituency, where there is water all right. It is in the form of black fungus, growing through the walls and wardrobes and into the clothes and children's toys belonging to my constituents. They ask me, "Why can't we have the capital investment to dry our houses and keep our families warm and dry?" I say, "It is because of a number of reasons connected with the kind of Government we have." They say to me that just 12 miles from that street, the first of four useless hunks of black metal sits on the River Clyde. It is a Trident submarine —one of four which together will cost the British taxpayer £33 billion. Those four useless pieces of metal are pointed nowhere and are bristling with nuclear weapons aimed at nobody.
203 I say to my constituents and to the Minister that, if we need £5,000 million to make Scotland's precious water even more beautiful and clear, we can take that money off the Trident budget, scrap those useless pieces of metal and beat them into the ploughshares that can make a better world for all our people.
§ Mr. Malcolm Chisholm (Edinburgh, Leith)I should like primarily to address water privatisation, but I cannot forgo commenting on the Secretary of State for Scotland's amazing interview at the weekend in which he said that decentralisation of power to a Scottish Parliament was quite unnecessary as it was to be decentralised to new local authorities instead. As everybody knows, power has been drained from Scottish local authorities and all other local authorities over the past 13 years, and the restructuring of Scottish local government is fundamentally about further erosions of the remaining limited power.
I am not interested in redrawing the map of Scottish local government; I am interested in giving back powers to the various bits of that map and in creating a Scottish Parliament within the United Kingdom to oversee the map as a whole. That is what subsidiarity is all about—decision-making as close to the people as possible, as the preamble to the Maastricht treaty puts it—and that is what thousands of people were demonstrating about on Saturday in Edinburgh.
Referring to water privatisation, the first thing to say is that no devolved Scottish Parliament would even consider it, as there is overwhelming opposition to water privatisation within Scotland. The second thing to say is that the Tories cannot even claim a spurious Scottish election mandate for it as there was no mention whatsoever of Scottish water privatisation in their election manifesto. They did not mention it, nobody wants it, so why are we getting it? The reason involves ideology, profits and the public sector borrowing requirement.
The ideology reason is not susceptible to logic—the private good/public bad myopic chant that has been repeated so insistently and so destructively since 1979. A consequence is the belief that adding to the PSBR is unacceptable, although private borrowing is okay. In each case, however, the sums involved are far from enormous. On some of the details, I might disagree with my hon. Friend the Member for Dundee, East (Mr. McAllion).
Investment of £5 billion is required in Scottish water over the next 15 years, which means an average borrowing of £333 million each year. However, the borrowing consent for water this year is £218 million, so we are talking about an extra £115 million on a Scottish Office budget of £13 billion. The annual loan charges on that £115 million would be about £12 million—equivalent to a 5 per cent. increase on current water charges. The small amount of extra borrowing required would not be covered by the Barnett formula, as there is no comparable programme in England or Wales. It could be negotiated directly with the Treasury, which is where the problem may lie.
Some of the £115 million extra a year could come from the European development fund, a source that would not be available if water were privatised. There is, therefore, no argument in terms of investment, and to prove that further 204 we can look to the record in England where there has been no source of cash since privatisation that was not equally available before it.
The more we look at the argument from the point of view of public money and investment, the more ridiculous it becomes. It is the Government's fault that investment to meet the EC directives is still required. The relevant directives were issued in 1976 and 1980, but in the 1980s the Government did nothing. When the Government eventually decided to spend more public money in England, they threw it in completely the wrong direction. Some £5 billion of debts were written off for the new privatised water companies in England and Wales; £1.5 billion was handed out to those same companies; property and land worth £233 million was just given away; and £160 million was squandered on consultants and others to float the assets. None of the water companies had to pay corporation tax for 17 years—a clear £2 billion loss to the public purse.
Who has gained? Certainly not the Treasury or the public. Average bills have increased by 50 per cent. since privatisation in 1979. Last year, the number of complaints went up by 131 per cent. and, most importantly, the number of disconnections went up by 177 per cent. Since privatisation in England and Wales, 50,000 homes have been disconnected, which is the ultimate obscenity. If it came to disconnections in Scotland, I would support and become involved in direct action to stop any of my constituents from having their water turned off.
The people who require and benefit from disconnections are, of course, the shareholders and the company executives—the sole beneficiaries of water privatisation. Beneath the rhetoric, as always, lie the profits. In 1990–91 in England, pre-tax profits were £1.369 billion—£400 million of that went out in dividends. In the case of Welsh Water, that money went into luxury hotels, while £50,000 from Thames Water went into the Tory party coffers. Thousands and thousands of pounds went to the various water company chairmen.
Between 1990–91 and 1991–92, the salary of the Welsh Water chairman went up from £76,000 to £143,000, the salary of the chairman of Southern Water went up from £78,000 to £142,000, and the salary of the chairman of Thames Water went up from £73,000 to £160,000. Over and above that, last year, the 10 chairmen made £7.42 million through share options—buying shares cheaply and selling them at a profit.
Instead of windfall gains at public expense, we need a policy that centres on public investment and fair charging. Next year, in Scotland, water charges will be related to council tax bands, which is a step in the right direction. Post-privatisation we will be faced with either a high flat-rate charge or water metering. Both cause hardship for low-income families and both bring disconnections in their train.
Water belongs to us all and the supply of water is a fundamental right. We in Scotland will not stand idly by while the water is stolen and that right is abolished. If the Government were wise, which they are not, they would listen to the people of Scotland on this issue. If they were wise, they would not just consider the popularity of our case and the justice of our cause; they would think about the political repercussions for themselves of treating the Scottish people with such undisguised contempt.
§ Mrs. Irene Adams (Paisley, North)When I made my maiden speech in 1990, I referred to my late grandfather who had come here some 60 years before, not as a Member of the House, but as a hunger marcher. When he arrived here he was quickly marched off to the nearest railway station and put on a train back to Scotland.
I asked myself then, and I do so now, what has really changed in that time? After all, the rate of unemployment is higher now than it was then, and more people are now homeless. We can conclude that very little has changed.
That, however, would be singularly untrue. There were great changes that were not handed out by the great and good here at Westminster but were hard fought and hard earned by people such as my grandfather, who marched all that way on an empty stomach.
For example, wages councils achieved great changes in working conditions, and changes improved local government so that it is directly elected by people to serve them, yet the Minister is now determined to take that system away and hand out quangos to his friends. There were slum clearance changes and massive municipal house building programmes. We saw the national health service come into being, and equal rights for women.
Those are but a few of the things that changed in that time, but in 1979 a Government were elected with a vision—the survival of the fittest and the weakest shall go to the wall. That Government set about dismantling each of the gains that people had fought for and won. That vision was not acceptable to the people of Scotland.
In the election earlier this year, the Government asked the Scottish people whether they wanted to maintain the status quo—the Union. The Conservative party was the only party to ask that question. Twenty-five per cent. of the Scottish people said yes, but 75 per cent. said, "We may not all want the same thing but we do not want the status quo."
We are continually told that this is the listening Government and the consulting Government. They were not so keen to listen to that 75 per cent. of the Scottish people, so they said, "We won't bother with them. We will get a couple of dozen of our mates round to breakfast and hear what they have to say." Unfortunately, they forgot to tell the rest of us what they had to say; we are still awaiting the outcome of that breakfast meeting.
The Government consulted people on hospital trusts. The people told them that they did not want them, so the people got them. The Government are about to consult people on the privatisation of water, which they forgot to mention in their election manifesto. They did not tell the Scottish people that they intended to do anything with water. They are now telling people that they will consult them, but they are not that sure whether they will accept the answer the people give—they will weigh up all the arguments first.
We have heard that 50,000 people have had their water disconnected in England and Wales. That is not only a disgrace but morally wrong. Water is a right of the people, not something to be sold to the people. It is something to be paid for and administered by the people, but not to be taken and sold back to them. It reminds me of the story of the white men saying to the Indians, "We will buy your land for this string of beads." The Indians laughed, 206 because they had no concept whatsoever of such ownership. But the Indians were right, because nobody should own the land or water apart from all the people.
§ Mr. StewartI congratulate the hon. Lady on her ringing call for the nationalisation of housing.
§ Mrs. AdamsThe Minister apparently heard that, but he does not hear anything else that the people of Scotland have to say. Did he hear the 25,000 voices in Edinburgh on Saturday? Perhaps he will comment on that later—but I doubt it. The 25,000 voices that were heard on Saturday wanted many things, but they did not want the status quo. Apparently the Government had their ear plugs in when those voices were speaking.
When I, like my grandfather, go home to Scotland on the train every week I wonder why I return empty-handed from the Westminster Parliament to the people who elected me—from a Government who are in the minority in Scotland, yet who continue to force their views down the throats of the people of Scotland. I tell them now that they had better be the listening Government. If they are not, there will be little of the Union left.
§ Mr. Ian Davidson (Glasgow, Govan)I share the concern expressed by my hon. Friend the Member for Midlothian (Mr. Clarke) about the fact that a debate of such magnitude has to take place at this hour and in such circumstances. I agree with my hon. Friend the Member for Glasgow, Hillhead (Mr. Galloway) that it is deplorable that only one Scottish Conservative Member is here.
I also greatly regret the fact that no hon. Member from any of the other Opposition parties in Scotland is here, either—although I believe that a Liberal Democrat came in for 30 seconds while my hon. Friend the Member for Paisley, North (Mrs. Adams) was speaking. It is unfortunate that no one from the other parties is here, because it would have been helpful for us to be able to show that all the Scottish Opposition parties are united in the call to oppose the privatisation of water.
Like the other hon. Members who have spoken, I want to raise my voice to express what the people of Scotland are saying. There is widespread opposition to the Government's proposal, but also widespread cynicism about whether there is any value in contributing to the current consultation. There is a view that the Government have already made up their mind, that they are working through a political project, which we are also seeing in local government. That project involves the centralisation of many powers to the Scottish Office and its civil servants, the destruction of many local authority services, the privatisation of many of the services that are not being destroyed, with many of the services that remain handed over to quangos stuffed full of Conservative cronies.
That is a disappointing vision of how the governance of Scotland is to operate in future—but the people of Scotland have every justification for believing that that is the perspective that the Government have in mind for them.
I accept, as do most hon. Members, that something has to be done about water and sewerage in Scotland. We realise that bills will have to be met for the necessary work, but the Government must give us a commitment that they 207 will genuinely seek the best way to provide the service, rather than starting from what happens to suit their dogma.
I am disappointed that the Government have not published the Quayle Munro report. Clearly there is information there that would enable people prepared to examine the subject without preconceptions to establish which of the options is most likely to meet the needs of Scotland's people at the minimum affordable cost. The fact that the report has not been published leads us to the conclusion either that there is something in it that the Government want to hide, or that it would reveal to us that they had already made up their mind.
That is regrettable, because there is now a cynicism in Scotland that goes beyond the ranks of those who would normally oppose the Government and all their works. Like many of my hon. Friends, I have been surprised by the enthusiasm with which people are queuing up to sign petitions against water privatisation. But I am also despondent about the degree to which they feel that what they do will not make a blind bit of difference anyway. That is not healthy in the Scottish body politic.
The Government are playing with fire; they are alienating the vast majority of the Scottish population from the political process. They may manage to get through one manoeuvre or another; they may manage to perform a particular action—but in the longer term what they are doing is unhealthy for the democratic process. I believe that the Government will be surprised at what they are sowing for the longer term.
There is alienation not simply from the Minister's party, but from the political process itself. The Government are forcing people outwith the bounds of normal democratic politics, which is not a healthy development. We have already seen among the ranks of some of the Opposition parties fundamentally undemocratic currents and elements that choose to operate in an undemocratic manner. Like many other people, I am not especially happy about that, but I recognise that that is the direction in which those groups feel obliged to move.
The Government must take account, to a far greater extent than they have been prepared to do in the past, of Scottish opinion. I hope that, when the consultation views come in, the Government will give evidence, after they have produced their conclusion, that they have actually listened to what Scots have said and not simply proceeded on the basis of doing what they had already made up their mind to do before the exercise began.
§ Madam Deputy SpeakerI call Mr. Chris Smith.
§ Mr. McLeishThat is close, Madam Deputy Speaker. It is 4.40 am, so there may be some excuse.
§ Madam Deputy SpeakerPlease accept my apologies.
§ Mr. McLeishI should not mind the mistake if you had not mistaken me for a London Member. Scots may take some umbrage, but we shall continue.
My hon. Friend the Member for Midlothian (Mr. Clarke) should be congratulated on winning this debate. It is a subject that the Government would not bring before 208 the House, partly because of the embarrassment it would cause even to sections of the Conservative party in Scotland, including councillors and some of the Minister's hon. Friends on the Back Benches, who I am sure will join us at a later date in criticising the proposal heavily.
It is also important to say that this has been an excellent debate. My hon. Friends have focused sharply on the issues. There has been passion and knowledge, and my hon. Friends have demonstrated the outrage that is felt throughout Scotland about the ultimate absurdity, even for this Government. To talk about the "ultimate absurdity" involves taking into consideration some offences and injuries to the Scots over the past 14 years which are themselves pretty dramatic and pretty terrible.
The debate has highlighted three particular points. First, the Government's attitude has shown that there is a compelling case for the issue to be debated in Scotland in a Parliament of Scots where it can be debated by Scots for Scots. It could be given appropriate time and importance there, and such a Parliament would enable Scots to view the proceedings, rather than our having a debate at this time of the morning 400 miles away from the scene of activity.
The second point that has emerged is that there is no compelling case for water privatisation. It is an absurdity and I look forward to listening to the Minister trying to justify such a measure. We shall, of course, be told that local government reform and water privatisation are the subjects of consultation.
The second point leads me on to the third. Who can believe any consultation process started by this Government? Both consultation processes end on 29 January next year. Is not it the case—the Minister would agree if he was being honest—that local government reform in its simplest form is a paving measure for water privatisation? The two are inextricably linked. The consultations finish at the same time. The Prime Minister goes one step further. He sees local government reform as a substitute for significant constitutional change. My hon. Friends and I disagree with that viewpoint.
It seems curious to me that when the Government are taking stock after the 9 April election, in which they were heavily defeated in Scotland, they are still pursuing a matter that seems not only to outrage Scots, but to insult them. As my hon. Friends have said, why do the Government listen to no one at any time?
The feeling of outrage, as my hon. Friends have suggested, goes well beyond party political differences. It is reaching areas that I have never seen involved, and people of all parties and of no party. The vexed question [...] when the Government are going to put the public interest of Scotland before the political ideology of the Conservative party.
My hon. Friends have raised a number of important issues and I will highlight some of them. My hon. Friends have mentioned the curious position of Quayle Munro. It was the consultancy company that was commissioned on 4 August to carry out a study on the options for water. The study cost the taxpayers £50,000. The Government refused to publish the brief. They have also refused to publish the report. From the Government's report that was published in the House, it is clear that there is no reference to that study, which cost £50,000 and which is supposed to be the basis for this debate and the debate that will continue until 29 January.
209 The Government must be asking some searching questions. Why does Quayle Munro seem to be the flavour of the month, every month in Scotland, in relation to Scottish Office work? Why has that company been given £563,000 in only a few years in relation to the Scottish Bus Group, the Skye crossing and now Scottish water and sewerage services?
It is widely known in Scotland that the firm has no technical competence or technological experience. On what considerations do the Government base their commissioning of work from that company? When the Minister responds, I hope that he will tell us why Quayle Munro seems to be favoured when most of its competitors, which are losing contracts against that firm, regard that with dismay and disbelief.
How on earth can the Opposition take seriously a report published by the Government, based on a report commissioned by the Government which has not been published or discussed, but which has cost the taxpayers of the United Kingdom nearly £50,000? That is a key issue to which we want an answer. This is a shabby and tawdry affair. The Government are simply not coming clean about what they are doing with taxpayers' money. We demand answers to those questions—hopefully tonight, or on the other occasions when the issue will be debated.
The necessary investment has also been highlighted in the debate. Most of my hon. Friends know that the Government are arguing that investment equals privatisation, but that is simply a smokescreen. My hon. Friends have pointed out that we do not need to go into the private sector to be privatised and to win the £5 billion-worth of investment.
Most people accept that some £5 billion may be needed over the next 15 years to tackle the Community directives about clean water and waste. That should be the basis for reasonable discussion, but we do not have such a discussion. Instead, the Government use the pretext of the necessary investment to argue for privatisation.
In many recent articles, and in terms of the comments made by my hon. Friends, the £5 billion can be won because, at the present time, the Government do not contribute a penny to the water service in Scotland. Can the Minister deny that? Does he not accept that that is true? The Minister does not seem to be sure. Do the Government accept the view that not a penny comes from the taxpayer towards the provision of water services in Scotland?
§ Mr. Allan StewartAs I will explain to the House shortly, the hon. Gentleman is talking the most absolute nonsense.
§ Mr. McLeishWill the Minister confirm that, in Scotland, apart from the borrowing consent—
§ Mr. StewartThat is right—the borrowing consent.
§ Mr. McLeishI hope that my hon. Friends will forgive the digression, but I think that the Minister may want to know something about how capital expenditure operates. Does he not accept that the Treasury allows Scottish local authorities, by way of a signed piece of paper and a bottom-lined activity, to borrow that money? Every penny of the debt and the service comes from the consumer. Therefore, the taxpayers of Britain do not provide a penny towards the provision of the water service.
§ Mr. Stewartindicated dissent.
§ Mr. McLeishThe Minister can shake his head all morning.
§ Mr. StewartWill the hon. Gentleman explain why such borrowing consent has been consistently classified as public expenditure by every Labour Government?
§ Mr. McLeishThis is an interesting diversion, but let us return to the key issue. The Minister will not accept that, at present, Scottish local authorities and their consumers pay for every penny of expenditure on the water service.
That is the conclusion of experts, and it is obviously right. Does not the Minister accept that the £5 billion can be found? Calculations suggest that, at the moment, capital expenditure for water and sewerage is more than £200 million a year. The figure of £5 billion over 15 years is about £340 million a year. We are talking about the possibility of servicing the debt on an additional £100 million of capital expenditure. That is simply a smokescreen. We do not need privatisation to win such investment; at present it can be done comfortably by Scottish local authorities.
My hon. Friends have also highlighted the experience of England and Wales. I feel sorry for people in England and Wales, because they are the victims of a disaster: first the sell-off; secondly, the rip-off; thirdly, the pay-off, in the form of the Thames Water contribution to the Conservative party. What a disgrace!
The Government heap insult on injury by not only privatising the most precious asset that any community can have; they then create what my hon. Friends have described as a new batch of water millionaires. In 1988–89, the 10 chairmen of the water companies paid themselves £400,000. In 1991–92, the same 10 chairmen paid themselves £1.2 million. What about wage restraint? What about ripping off the consumer? What does that do for efficiency, value for money, effectiveness and cleaning up our dirty beaches and sewage-laden sands? Nothing whatever: it is simply a licence to print money. I hope that the Minister will address that matter.
My hon. Friends have also mentioned disconnections. "Barbarism" and "obscenity" were two words that I heard. Most Scots agree. They are simply outraged that, although in a culture which values a precious asset we have no disconnections, in England and Wales the ultimate test of the marketplace is to disconnect people.
Despite being given every opportunity, as my hon. Friend the Member for Dundee, East (Mr. McAllion) said, the Secretary of State for Scotland refused to rule out disconnections in his vision of water and sewerage services in Scotland. Perhaps the Minister will want to address that problem and reassure the House that there will be no connections, regardless of the option selected. He is a charitable man. I am sure that every sinew of his body is tingling with embarrassment, outrage and concern at the possibility of disconnections taking place in his constituency of Eastwood. He has an opportunity to go one step further than the Secretary of State and tell us that there will be no disconnections, regardless of which option he selects for the future.
The debate has been good because it has highlighted, I think conclusively, the fact that the Government must be deeply embarrassed. The Scots are outraged. There is no justification for privatisation and no case on investment. What we see is the bidding of the Treasury, leading Ministers in the Scottish Office once again to bend the 211 knee. When will the Ministers in the Scottish Office stand up for Scottish interests and tell the Treasury and the ideologues of Smith square and No. 10 that we simply will not have a scandalous privatisation of the water service?
Let us keep the service public, let us invest what is required, and let us make it clear that every pound spent by consumers is returned to them in value for money, instead of water millionaires, disconnections and the whole paraphernalia of the disastrous privatisation in England and Wales.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)One must congratulate the hon. Member for Fife, Central (Mr. McLeish) on at least managing to work himself into a considerable lather at 4.53 in the morning. I join him and other hon. Members who have spoken in the debate in congratulating the hon. Member for Midlothian (Mr. Clarke) on his success in the ballot and on providing us with this opportunity to debate the closely related subjects of local government and the future structure of water in Scotland.
The hon. Member for Midlothian and some other hon. Members have raised the issue of the Scottish Parliament. Madam Deputy Speaker, you would not wish me to dilate on that matter. I repeat my view that if the people of Scotland wish to have a Scottish Parliament, they have and have always had an opportunity to obtain that by voting for the Scottish National party in sufficient numbers.
§ Mr. DavidsonDoes the Minister agree that at the last election the Labour party stood on the basis that it would introduce a Scottish Parliament? It is not reasonable to say that the only choice is Unionism and the status quo or independence. Indeed, the range of people who want a Scottish Parliament of some sort stretches across all the Opposition parties; it is not solely the reserve of the SNP.
§ Mr. StewartI do not dispute for a moment that the hon. Gentleman and his hon. Friends want a Scottish Parliament. But, as I understand it, the Labour party's position is that it accepts that the Government of the United Kingdom should be made up of that party which commands a majority in this House. That is not the position taken by the SNP and it never has been.
I congratulate all hon. Members at least on their stamina in being here at 4.55 am and, indeed, on their impassioned and—I certainly would go so far as to say —on occasion, knowledgeable speeches. I look forward to seeing them all—as I am sure does their Whip, the hon. Member for Paisley, South (Mr. McMaster)—at the Scottish Grand Committee at 10.30 this morning.
The first of the two related subjects which the hon. Member for Midlothian brought to the attention of the House was local government reform. Since October, there has been tremendous interest in the consultation paper on local government reorganisation. We have sent out more than 18,000 papers as well as the consultation video and leaflets. The message that continues to emerge from those within local government, members of the public and other organisations is that we now have a considerable opportunity to improve things.
Although, of course, the 1975 reorganisation served its purpose, we now have a chance to develop a sense of 212 identity between communities and local authorities. That identification has been weakened in many cases. I hope that Opposition Members who did not concentrate—I do not criticise them for that—on the wider debate about local government will take the opportunity before the end of the consultation period to put in their constructive comments on the structure of local government they want to see. We believe that the process has got off to an excellent start. It is engaging many thousands of people across Scotland, whose input will be invaluable in the decision-making process.
Opposition Members made the general point that there was some hidden agenda about local government reorganisation; they suggested that it was about moving power and responsibility from local to central Government. It is specifically not about that. We have said that we believe in the enabling rather than the providing role of local government, but that does not take away the responsibilities of local government for ensuring that services are provided. If we intended to move power and responsibility from local authorities, we would hardly have announced recently the transfer of responsibility for care in the community to local authorities in Scotland. So I assure Opposition Members that there is no hidden map or agenda for the reorganisation of local government, and that it is not about the transfer of responsibility from local to central Government.
§ Mr. DavidsonCan the Minister give us a cast-iron guarantee that none of the powers or activities presently given to local authorities will be removed and given to central Government?
§ Mr. StewartI can repeat the general assurance. However, there are some aspects—[HON. MEMBERS: "Ah!"] I shall give an example. At the moment there is a division in the responsibility for trunk roads, and the responses to the original consultation paper showed that there was widespread dissatisfaction with the present arrangements.
There is no general thrust behind the proposals to move the major responsibilities of local government to central Government. That is not the objective.
§ Mr. McLeishOn a lighter note, if the Secretary of State selects any of the options that do not include Eastwood as a separate entity, will the Minister assure us that he will not resign from the House?
§ Mr. StewartI assure the hon. Member that my right hon. Friend the Secretary of State is a wise and objective man, who will consider all the representations that he receives in his customary, objective way—[HON. MEMBERS: "All the representations?"] My right hon. Friend will consider all the representations from hon. Members and from everyone else at the end of the consultation process.
§ Mr. WrayThe Minister mentioned the nationalisation of housing to my hon. Friend the Member for Paisley, North (Mrs. Adams). Is there to be any reform of housing? Is he aware that 37,500 people were registered homeless last year and that 11,500 of them involved families, which means that 84 children were made homeless every working day of the year?
§ Mr. StewartThe debate is about local government and I can assure the hon. Gentleman that we envisage that 213 local authorities will continue to have a responsibility as housing agencies, along with others such as Scottish Homes and housing associations.
My time is now very limited, so may I deal with hon. Members' remarks about water and sewerage? There is an inescapable need to study the structure of the water and sewerage services in Scotland. Local government reorganisation makes that necessary.
I emphasise that the consultation paper sets out a range of possible options and we genuinely want people's well-considered views on them. I hope that respondents will approach the exercise with the same seriousness and open-mindedness as we do.
Frankly, all the options have advantages and disadvantages. It is a question of striking a balance and we want to get that right. It will require careful thought. Knee-jerk reactions against privatisation may make Opposition Members feel good at any time of the day or night, but we will need more than that. Such reactions are not a substitute for thought. We must ask a number of questions.
The changes resulting from the reorganisation of local government provide a good opportunity for asking the questions, but we must also consider financing the capital investment. Opposition Members made some well-considered comments on that. There is general recognition that major capital investment will be required and there is common ground across the House on the broad level of the sums that will be required. If a public sector agency is to undertake that capital investment, fewer resources will inevitably be available for other public sector projects. In any public expenditure, there is an opportunity cost.
I must tell the hon. Member for Fife, Central that the borrowing consent that has been given to the regional and islands authorities naturally counts as public expenditure. The fact that it has counted as public expenditure under this Government and all previous Governments, whatever their political persuasion, cannot be ignored.
The hon. Member for Glasgow, Hillhead (Mr. Galloway)—
§ In accordance with Mr. Speaker's ruling—[Official Report, 31 January 1983; Vol. 36, c. 19]—the debate was concluded.