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 only increased use of market principles, private involvement and further competition will ensure effective and sustainable water provision in Scotland.

This is worrying in the context of climate change affecting water provision in Scotland. For instance 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 work caused by climate change. They acknowledged that external sewerage flooding was often due to heavier bursts of rainfall - ackowledged to be a symptom of climate change - 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.

*Sir Ian Byatt’s Co-Authors and sceptics

One of Sir Ian Byatt’s co-authors was Julian Morris, Executive Director of the International Policy Network. The International Policy Network received $315,000 of funding from the US oil giant Exxon, between 2003-2005 . They have published numerous books doubting the scientific assumptions of those warning the world of global warming and its effects as well as the economic costs . The International Policy Network has strong links to the Competitive Enterprise Institute (CEI), sharing staff and an office in the US. The CEI has received over $2million from Exxon Mobil since 1998 . Given the level of funding from Exxon Mobil, the largest Oil company in the world, it is no surprise that one of the key aims, of these think tanks, is to debunk climate change as a myth

According to the CEI; Although global warming has been described as the greatest threat facing mankind, the policies designed to address global warming actually pose a greater threat. The Kyoto Protocol and similar domestic schemes to ration carbon-based energy use would do little to slow carbon dioxide emissions, but would have enormous costs. These costs would eventually fall most heavily on the poorest nations in the world. Luckily, predictions of the extent of future warming are based on implausible scientific and economic assumptions, and the negative impacts of predicted warming have been vastly exaggerated. In the unlikely event that global warming turns out to be a problem, the correct approach is not energy rationing, but rather long-term technological transformation and building resiliency in societies by increasing wealth. CEI has been a leader in the fight against the global warming scare .

The use of Think Tanks, receiving payment, to produce research debunking global warming is widespread. Professor David Henderson has spoken and given papers to both the CEI and the George Marshall Institute critiquing the IPCC. The George Marshall Institute, like the CEI, received substantial donations from Exxon Mobil for climate change work and also attempts to discredit the phenomenon of climate change whenever and wherever possible. The sum donated to the George Marshall Institute by Exxon is $630,000 since 1998 .

Another signatory, [Ross Mckitrick], recently contributed an essay in a book, ‘Shattered Consensus: The True State of Global Warming’, this was published by the Marshall Institute. The book ‘consists of ten essays on global warming, covering the earth’s temperature history and disparities between what has been predicted about climate change and what has actually been observed’ The CEI also state ‘Shattered Consensus will also shatter commonly held opinions about global warming and leave the reader with serious doubts about whether policies to "fight" climate change are warranted at all’.

Mckitrick is also a senior fellow with the Fraser Institute, this Institute has also received funding from Exxon; $120,000 between 1998 and 2004. Their view of climate change is that: Climate change activists are exaggerating the certainty in the linkage between human action and climate change and advocating policies that offer no environmental gain, but a lot of economic pain. These prescriptions are likely to deprive society of the economic productivity it needs to protect environmental quality .

One of the CEI Adjunct scholars Roger Bate wrote a book alongside Julian Morris, ‘Global Warming Apocalypse or Hot Air’, published by the Institute of Economic Affairs (IEA) . Roger Bate has also written a recent book, ‘All the water in the world’, published also by the IEA. In it he recommends that only privatisation and markets can solve the worlds water crisis. He is also a fellow at the IEA and the American Enterprise Institute (AEI). Founded in the '50s by Lord Ralph Harris, the Institute of Economic Affairs was the first organisation in the UK to publish Milton Friedman's monetarist economics. The IEA are well known for their work in the field of privatisation. It was they who commissioned Stephen Littlechild in 1981 to write the paper "Ten steps to denationalisation". Coincidentally, another prominent member of the IEA, John Blundell, recently advocated the full privatisation of Scottish Water. The AEI is the Godfather of Washington neo-conservative lobby groups - America's richest, largest and most influential think tank. It is also regarded as one of the Bush administration's closest allies. Between 1998 and 2003, the AEI received some $925,000 from Exxon Mobil The American Friends of the Institute for Economic Affairs have received $50,000 from ExxonMobil since 1998. Another of Byatt’s other co-authors, Colin Robinson, last year wrote a paper for the Scottish think tank the Policy Institute saying how Scottish Water needed to be privatised and adhere solely to market principles. The Policy Institute, based in the Scotsman building and sponsored by the Scotsman, amongst others, are unambiguous in their aims. They state, ‘The Policy Institute is an independent body committed to researching how principles of market economics, property rights, the rule of law and limited government can be applied to modern Scotland’ Robinson is currently writing a book called ‘Global Warming and the Market Economy’, this is also to be published by IEA

Alan Peacock, another co-signatory, is current board member of the Policy Institute and was the founder of the David Hume institute, another right-wing Scottish think tank set up in Edinburgh in 1985. The David Hume Institute writes and organises ‘research, publications, conferences and events primarily concerned with market approaches to public policy’. They reiterate this when they state that its ‘orientation is towards the relevance of market approaches and market solutions in determining economic well-being’. In 2003 Peacock gave a presidential address to the David Hume Institute titled ‘The Political Economy of Sustainable Development’. In his address he criticised government for taking too seriously those advocating sustainable development policies; intimating that government had been taken in by the claims of environmentalists.

He said,

With the strong commitment to SD already pronounced by our national and devolved government, I must then show how economic analysis throws light on the policies which they promote. It is soon revealed that these policies are based on somewhat tenuous foundations, over-influenced by the dramatic utterances of environmentalists. Given his lack of judgement on the climate change issue and his propensity to disregard such a large body of evidence and his links and apparent support for the above people and organisations , it is reasonable to ask if this is the man best placed to be the chairman of the economic regulator for the publicly owned water sector in Scotland.

Affiliations

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