THE public should be given a role in setting rail fares and energy prices after the approach led to a consumer-friendly deal with Scottish Water, a former Scottish Government minister has said.

Peter Peacock was chairman of the Customer Forum for Water, which helped negotiate a new deal which is expected to see water charges in Scotland remain well below the average household charges of private water companies in England and Wales.

The plan, backed by the industry regulator, means Scottish Water and the Water Industry Commission are committed to maintaining low-level increases in charges for the next six years.

Loading article content

Mr Peacock says the model should be extended to help rein in power companies and tackle disillusionment among voters and consumers.

He said the Scottish Water forum had demonstrated the effectiveness of the idea. When the forum was set up, the water regulator said it would be willing to back any deal agreed between the forum and Scottish Water.

Future investment will also be directed according to consumer concerns about issues such as flooding and water quality.

Mr Peacock added: "Customers have secured a keen pricing policy suitable for these times of economic pressure, helped drive greater efficiency to deliver this, and prioritised service improvements customers want.

"There is every reason to believe that a similar approach in other utilities like rail or power could have powerful effects too if customers in those sectors were empowered more fully by the regulatory process."

Writing in today's Herald Society page, he added that people felt they could have little impact over the issues that shaped their lives. "There has never been greater disillusionment or a sense of powerlessness by consumers in the face of corporate behaviours at our banks, insurance companies and major utilities.

"The political and policy community is increasingly looking at how it may be possible to genuinely engage and empower people in the face of their growing fatalism."

Dr Stephen Littlechild, of Cambridge University's Energy Policy Research Group, said the customer forum had been successful.

He said: "Empowering customers has secured a better and more informed outcome than would have been possible with the traditional confrontational regulatory approach.I see customer engagement as one of the major advances in utility regulation, and the Scottish water sector is now at the forefront internationally."

Professor Simon Parsons, director of strategic customer service planning at Scottish Water, said: "We have found the insights and input of the customer forum very informative in reaching an agreed plan. We value the additional research that the customer forum undertook, which has given a deeper understanding of customers' views in relation to the balance between charges and service improvement."