Labour backbenchers pile on pressure for public water ownership

(by Karma Loveday)

Water minister Emma Hardy had to repeatedly set out the Government’s position on water ownership in Parliament last week, as Labour backbenchers queued up to make the case for greater public control.

Alongside familiar champions of nationalisation – including Norwich South MP Clive Lewis who secured the Urgent Question on the performance of the water sector – Labour voices from across the country challenged the minister on the party’s position in rejecting nationalisation. For instance, Emma Lewell, MP for South Shields, asked: “Will the minister explain why, despite acting on rail, energy and other industries, the Government are not acting on the strong expert evidence and calls from the public and campaigners to nationalise the water industry?”

Many of the MPs’ comments were specifically concerned with encouraging special administration for Thames Water, but the debate was broader. For example, Alex Sobel, MP for Leeds Central and Headingley, said of Yorkshire Water: “Is it not also a broken business, with debt more than four times its revenue, while still paying over £50m to shareholders last year? What financial studies has the minister done to look at Yorkshire Water’s viability? Is it not time that the people of Yorkshire have the same say over their water company as the people of Wales?” South East Water was also repeatedly referenced, and there was a separate debate on ‘water supply in Kent’ last week to which the minister also had to respond.

Hardy cited the cost of nationalisation as a key reason for the Government’s position, which is to consider other models but stop short of full public control. She said: “My focus has always been on the quickest and most effective way I can deal with some of the problems in front of me. There are questions over how much nationalisation would cost – we have heard them before – and we know that the water companies have £82.7bn of outstanding debt.

“It is always difficult – again, this probably goes beyond my role and into that of the Treasury – to decide on priorities about what we spend money on, but that is not for one moment to give the impression that I am happy with the status quo or that I think the current situation is good, because I simply do not. It is about how we make the most effective change in the quickest way, which is why having set out in the White Paper a transparent process to look at not-for-profit mutuals and other different models is so important.”

Separately in the debate, she added: “I have always been in favour of mutuals, and I do not have a problem with not-for-profits, but we need a clear look at the process to see whether that would be in the best interests of customers before any change goes ahead.”

On the issue of gearing, Hardy pointed to the White Paper provision to look at water company debt levels. She said: “We need to look at what is a sensible and realistic level for them to hold, to ensure it does not undermine their sustainability or their ability to put customers and the environment first, which should be at the core of everything they do.”