Ian Byatt

Sir Ian Byatt is the current Chairman of the Water Industry Commission For Scotland. There is concern that such an influential and important role, supporting the publicly owned Scottish Water Industry, is in the hands of such a zealous supporter - per se - of liberalisation, competition and privatisation. Moreover, his links with Policy Networks and Think Tanks that share similar beliefs are also of concern to those who wish to see Scottish Water kept in public hands.

According to his Frontier Economics profile he ‘Was the England and Wales water regulator between 1989 and 2000. He oversaw the privatisation of the England and Wales water sector and established a successful regulatory regime for the only completely privatised water and waste water industry in the world. He was responsible for two fundamental periodic reviews of all functions and price controls for water companies. Ian also has extensive experience of providing economic advice to the Government at the highest level. Prior to becoming the water regulator, he held the position of Deputy Chief Economic Adviser to the Treasury, Head of Public Sector Economic Unit in the Treasury and was Director of Economics in the Department of the Environment’ .

In his role at the Office of Water Services, OFWAT, between 1989 and 2000 he was responsible for independent economic regulation of the water companies in England & Wales. Since 2000 he has advised the World Bank and governments around the world on matters relating to (privatising) the water industry. Sir Ian was an adviser to the Water Industry Commissioner from 2002 before being appointed Chairman of the Commission in 2005. In a Paper he wrote Sir Ian Byatt argued for an increase in competition and surprisingly for a regulator call for a decrease in detailed regulation. He stated ‘It is difficult to predict how fast competition will develop in the water industry. But it can be expected to strengthen the position of the customer. And in the presence of competition, it will be much more difficult for regulators and government to manage the details and the operations of the water companies. This would be very welcome’ .

He is also a council member of the European Policy Forum which attempts to generate market ideas for public policy. He has contributed to various papers for the EPF, including the paper titled ‘Do the Taps need changing’ . In it he argues that water companies in England and Wales need to replicate the Scottish model in the non-domestic sector by splitting network and retail supply. He has also authored a report in 2005, on behalf of the European Policy Forum, calling for no dilution of the EU Services Directive in order to ensure that public services were opened up to competition and (so-called) customer choice .

He is also a member of the Public Service Productivity Panel instigated by the Treasury.

Dubious Friends, beliefs and assertions

• Climate change denial

A clue to the political worldview of Sir Ian Byatt was given recently when he intervened in the consultation for the Stern Report. In it he demonsrated questionable views on climate change. Moreover, they are views that may well conflict with his role as Chairman of the Water Industry Commission for Scotland.

In fact Sir Ian Byatt has serious doubts that climate change is happening. In April 2006 he, alongside eight others, criticised the scientific assumptions of both the Stern Report on climate change and the global multi-agency and multi –government International Panel on Climate Change (IPCC). Last year, 2006, Sir Ian Byatt submitted a paper to the House of Lords Select Committee on Economic Affairs for their report on the ‘Economics of Climate Change’.

In his written submission he said

It is premature to conclude that any human-induced global warming would necessarily occur rapidly and further, that any such warming would be catastrophic. I do not, therefore, agree that drastic and far reaching action is justified, especially without more careful consideration of the type of action appropriate, and of the costs associated with it.

He also states that

Temperatures have risen in recent years. There is insufficient evidence, however, that this represents a lasting change in long-term trends, or that human activities are solely or primarily responsible for these changes, or that single remedies, such as radical cutting of carbon emissions, will reverse them.

Adding;

Market mechanisms can be particularly effective in an uncertain world. Government planning is inevitably based on imperfect knowledge. As new facts emerge and perceptions change, governmental planning easily becomes stranded in wrong solutions. In contrast economic agents have demonstrated a remarkable ability to adapt to change and to respond to market signals. As Professor Anderson has argued in his evidence, there is a wide range of ways of reducing CO2 and other greenhouse gas emissions. The use of market signals would help to explore which are the more acceptable and cost effective ways of doing this.

He is effectively, saying that while climate change may be happening, it may not be as bad or as catastrophic as some think. He seems also to be saying that the status quo should be maintained and that the precautionary principle should be disregarded. Further, he is arguing, with an unstinting and unwavering faith, that the market will ‘fix’ climate change; if in fact it is happening.

Sir Ian Byatt’attitude to climate change intimates to a faith in the invisible hand of the market to right the problem of climate change. It is difficult not to think that he believes that only increased use of market principles, private involvement and further competition within it will ensure effective and sustainable water provision in Scotland. This is worrying in the context of water provision in Scotland. As mentioned above a spokesperson for Scottish Water admitted earlier this year at a Waterwatch meeting in Fife that Scottish Water did not have a budget to carry out their work that took climate change into account. They acknowledged that external sewerage flooding was often due to heavier rainfall and the infrastructure could not cope when this happened. The WICS were of course the ones who set the budget and were advisors on the Water Industry Objectives Group who advised Ministers what the forthcoming objectives should be. It is unsettling that the Chairperson of that organisation is someone who denies climate change is taking place, especially when it is currently affecting the Scottish Water industry directly.

Affiliations

• Frontier Economics
• Water Industry Commission for Scotland
• European Policy Forum