SCOTTISH water is not to be privatised, at least for the next few

years. Three publicly run boards will take over from existing regional

authorities in 1996.

The announcement by Scottish Secretary Ian Lang was greeted with

relief but deep suspicion by the Opposition parties, who believe that an

outright sale to private companies is still on the cards, perhaps after

the next General Election if the Tories win it.

Mr Tom Clarke, the Shadow Scottish Secretary, said the people of

Scotland were entitled to claim that, on this at least, their voice had

been listened to, but he and other Labour MPs said the future of water

and its return to local authority control would be a main issue at the

next election.

Water charges, which have already risen by 55% since 1988-89, seem

certain to go up more sharply in future.

The boards, whose members will be appointed by the Scottish Secretary,

will have a remit -- indeed a necessity -- to attract a high level of

private investment to meet the huge resources needed to improve water

and sewage disposal standards. These are costs which the Treasury can no

longer afford to fund in full.

With #5000m needed over the next 10 to 15 years, the boards likely to

be set as North, East, and West companies are going to have to find

private money for most capital projects. The providers will insist on a

good return.

Mr Lang's well-predicted plan to replace the present local government

structure of regions and districts with 28 all purpose councils brought

intense Opposition protests, to the effect that the Government was

gerrymandering to suit Conservative fortunes.

His announcement led to a walk-out by Scottish Labour MPs, 40 of whom

trekked to Downing Street to hand in a demand for Mr Lang's sacking.

Earlier, Scottish Nationalists and Liberal Democrats slammed copies of

the White Paper down on Mr Lang's Commons despatch box before marching


The water deal struck with the Treasury by Mr Lang is heavily

dependent on private investment being won, because he is unlikely to

squeeze anything like the necessary cash out of the Chancellor of the

Exchequer. This year #237m is being spent on water and sewerage charges.

Mr Lang adroitly avoided another political pothole by assuring MPs

that he had no plans to allow disconnections for unpaid bills. Ministers

are thought to be planning to include water charges in council tax


But he faced a united Opposition onslaught on his planned local

government map which Mr Clarke, waving the White Paper, said Labour

found '' utterly repugnant''.

What was intended as drama turned to something close to farce as he

accused Mr Lang of having ''yet again betrayed Scotland's interests''

and went on to quote Leo Amery's words which helped bring down Neville

Chamberlain's government after early failures in the Second World War:

''You have sat too long here for any good you have done. In the name of

God, go.''

Mr Clarke, accompanied by 40 colleagues, then left the chamber and

headed for Downing Street. The earlier walk-out came after Mr Andrew

Welsh, for the SNP, called the White Paper ''an insult to Scotland'' and

Mrs Ray Michie, for the Liberal Democrats, said the water plans were

''the beginning of the road to privatisation''.

Mr Lang, with few Opposition MPs left on the benches opposite him,

remarked: ''I suppose in about 10 minutes from now they will reach

Downing Street but they will find the Prime Minister is not there.

''He is, as most of the rest of the country knows, still in Japan. But

the messenger at the door, I am sure, will be happy to take the


Opposition fury was especially roused by the plans to create

single-tier councils for East Renfrewshire, which will be virtually

conterminous with the Eastwood constituency of the Local Government

Minister, Mr Allan Stewart, and another in Stirling matching the

constituency of Employment Minister Michael Forsyth.

The proposals to create councils covering Bearsden, Milngavie, and

part of Strathkelvin as East Dunbartonshire, another in Kyle and

Carrick, adding part of Mearns to Angus, areas of Dunbartonshire

including Helensburgh to Argyll and Bute, and joining most of East

Lothian to Berwickshire, look to the Opposition like contrivances to

improve the Tory local government position.

Mr Lang insists that the transitional costs of changing the system --

between #120m and #196m up to the year 2010-11 -- will be more than

matched by savings of between #327m and #980m in the same period from

more than halving the number of councils.

Although the White Paper estimates annual savings on staff at between

#21m and #65m, it also states that redundancies are expected to run at

between 700 and 2200.

The number of councillors will fall from 1600 to about 1200. The

police and fire service arrangements are to be unchanged, and it is

being left up to individual councils to decide whether they wish to form

a joint board with another authority for the provision of any service.

Ministers are keener on smaller councils buying services either from a

larger neighbouring council or from the private sector.

Mr Lang said: ''I will expect to see a considerable development of the

enabling role of authorities and a willingness to explore the

possibilities of co-operation with the private sector.''