Labour in late lash out at "dysfunctional" water and adds it to nationalisation list

In a late departure from its manifesto draft leaked near the end of last week the Labour Party has included in its final, official version a note that the water industry was "dysfunctional" and needed to be taken back into public control.

The party's criticism focused primarily on dividend payments and inequality between customers and shareholders. It said privatisation had often led to "higher prices and poorer quality, as prices are raised to pay out dividends," and claimed water bills had increased 40 % since privatisation. It pledged to “replace our dysfunctional water system with a network of regional publicly-owned water companies.”

Water UK has pushed back saying Labour's manifesto did not do justice to the water industry's record post privatisation. "Since 1990, the water industry has invested over £130 billion in better services. The quality of bathing and drinking water is up, and customer satisfaction with water and sewerage services is over 90%," it claimed and added: "Access to private capital and other sources of funding, repaid through dividends and interest payments, has been key to that record of success."

Labour has once again thrown the energy sector onto the political football pitch in its manifesto. But it initially looked like it was not going to revisit its bid made during the previous election to add the water sector to the game. In the leaked draft manifesto water did not get a single mention in its wide-ranging list of infrastructure industries to renationalise.

Other policies that touched the industry were in Infrastructure investment, industrial strategy, National Investment Bank plans, Brexit and the environment.

  • Infrastructure investment: the National Infrastructure Commission is to be maintained. “Labour will take advantage of near-record low interest rates to invest £250 billion over ten years in upgrading our economy to ensure that our transport, energy and digital infrastructure is fit for the 21st century.”

  • Industrial strategy: emphasis is placed on regional resourcing and high speed communications. While there is no specific mention of water, the draft manifesto says: “Labour recognises that certain sectors are of strategic significance to the UK economy and often underpin wider industry, both established and growing. For each strategic industry the next Labour government will establish a Council modelled on the highly successful Automotive Council to oversee its future security and growth.”

  • A National Investment Bank: Labour will establish a National Investment Bank financed with an injection of initial public capital which will be leveraged using additional private sector finance to give £250bn of lending power over the next decade. Among other things the bank will be tasked with helping to deliver the industrial strategy, “by prioritising spending in line with its missions and objectives”.

  • Brexit: “We will drop the Conservatives’ Great Repeal Bill, replacing it with an EU Rights and Protections Bill…Throughout the Brexit process, we will make sure that all EU-derived laws – including workplace laws, consumer rights and environmental protections – are fully protected without qualifications, limitations or sunset clauses.”

  • Environment: “We will champion sustainable farming, food and fishing by investing in and promoting skills, technology, market access and innovation.” Specific initiatives that touch the industry include establishing ‘Blue Belts’ in the seas and oceans and work with farmers and foresters to plant a million trees to promote biodiversity and better flood management.