Labour rekindles renationalisation pledge
The Labour Party reiterated its manifesto pledge to renationalise the water industry at its annual party conference in Brighton last week.
First, shadow chancellor John McDonnell (pictured) included water in a list of industries to be brought back into public hands in his speech on Monday. He said: “Building an economy for the many also means bringing ownership and control of the utilities and key services into the hands of people who use and work in them. Rail, water, energy, Royal Mail – we’re taking them back.”
This was followed on Wednesday by Jeremy Corbyn singling the sector out as having failed in private hands. The leader told conference: “Labour is looking not just to repair the damage done by austerity but to transform our economy with a new and dynamic role for the public sector particularly where the private sector has evidently failed. Take the water industry. Of the nine water companies in England six are now owned by private equity or foreign sovereign wealth funds. Their profits are handed out in dividends to shareholders while the infrastructure crumbles the companies pay little or nothing in tax and executive pay has soared as the service deteriorates. That is why we are committed to take back our utilities into public ownership to put them at the service of our people and our economy and stop the public being ripped off.”
Water UK chief executive Michael Roberts responded in both instances. To McDonnell, he said: "The water industry has come a long way since privatisation and now has an excellent record on water quality, investment and customer service - something it didn't have when English water services were run by the government. Taking the water industry back to the 1970s is not what customers need, and threatens to see the return of the industry being starved of funds by a cash-strapped government.”
On Wednesday, Roberts added: “Corbyn painted a badly distorted picture of the water industry, saying that infrastructure was crumbling and the service was deteriorating. He’s wrong, because water companies have invested around £150 billion in the industry since privatisation, and customer satisfaction levels have been rising – they’re now around 90% according to the independent water consumer watchdog. We’re always happy to discuss our industry’s record, but let’s do it on the basis of facts.”
Despite these mentions on the Labour conference main stage, water renationalisation did not appear to be a talking point for delegates and not a single fringe meeting was convened to discuss it.
Meanwhile, wrangles about water company ownership continued last week in the papers. On Tuesday, in the middle of Labour’s conference, Ofwat chief executive Cathryn Ross wrote in the Evening Standard defending the industry and her organisation’s delivery for customers. She listed the water quality and customer service improvements that have taken place since privatisation and pointed out households pay only £1 a day for service on average. Ross argued that how companies behave, rather than what they have delivered, has prompted the scrutiny and she detailed how Ofwat holds companies to account for their behaviour.
Ross’ Standard article followed a spate of recent pieces in other newspapers including the Financial Times, which has recently featured a number of articles and letters slamming the privatisation model and Ofwat’s track record since as an economic regulator.