Unison fears water privatisation

Conservative enterprise spokesman Murdo Fraser told MSPs Scottish Water had become "a national embarrassment".

Mr Fraser claimed some small businesses had seen their bills soar by up to 500% since the body was set up a year ago.

He said Scottish Water should be mutualised to ensure businesses were not put at a competitive disadvantage.

Mr Wilson agreed that water bills should come down - but insisted that would happen as the changes implemented by Scottish Water bosses began to take effect.

Meanwhile, public sector union Unison said mutualisation would be "a smokescreen for privatisation".

Scottish Water has started down the path of more efficient services and that will keep down future charges for customers Allan Wilson, Environment minister

Last month CBI Scotland said a shake-up at Scottish Water was needed to curb huge bills faced by companies north of the border.

Mr Fraser said: "It is time for the Scottish Executive to take the necessary action to prevent Scottish Water continuing to be a burden on economic growth in Scotland and an embarrassment to the nation."

But the environment minister said the situation was improving.

"No one, least of all myself, wants to see costs rising, but I would wish to caution against the proposition that changing the whole system would necessarily benefit customers or consumers," said Mr Wilson.

"Scottish Water has started down the path of more efficient services and that will keep down future charges for customers."

We would call for the parliament to reject the private sector's aim to profit from this essential public service Unison's Dave Watson

Unison's Dave Watson said: "Any mutual body would be owned in effect by the financial institutions who provide the capital funds.

"They would insist on all services being provided by private contractors - as currently happens in Welsh Water."

Unison said it believed some people were using rising water prices to argue the case for privatisation.

It said price rise problems were largely due to unrealistic targets set by Scottish Water, false comparisons with the English Water industry.

Unison also criticised the Water Industry Commissioner, who it argued, aimed to generate investment through increased charging.

'Public service'

Mr Watson added: "The coalition agreement reflects Scottish people's continual rejection of privatisation.

"And we would call for the parliament to reject the private sector's aim to profit from this essential public service."

The CBI claimed last month that businesses have become a soft touch for Scottish Water, with companies across the country facing increases of between 50% and 300%.

Iain Macmillan, of CBI Scotland, said Scottish companies and the public may now be paying the price for water remaining in public ownership.

He called on the Scottish Executive to examine other options - including mutual ownership by customers or full privatisation.