Labour uses fake figure cooked up by industry to oppose water nationalisation

The Labour Party has used a sham figure of £90bn to claim that water nationalisation would be too expensive. The water industry paid for the ‘analysis’ that Labour cited in a recent official letter to anti-sewage groups.

United Utilities, Anglian Water, Severn Trent and South West Water commissioned the 2018 paper by the Social Market Foundation, which the government referenced in a letter to Rivers Trust, Surfers Against Sewage, River Action UK and Greenpeace.

It read:

The Social Market Foundation calculated the likely cost of renationalisation to be £90bn, drawing on publicly available data from Ofwat, the London Stock Exchange and the annual accounts of the water companies. Renationalisation would impose a huge burden on the public purse at a time when public finances are already stretched.

Water nationalisation saves money

But nationalisation of essentials like water actually reduces costs.

Moody’s rating agency has said water nationalisation could cost £14.5bn. But it should surely be much cheaper than even that. Shareholders have leeched £78bn off the need for water since Margaret Thatcher privatised it. If water companies hadn’t been privatised, the public could have saved the money.

Also, the average pay for water and sewage company CEOs in England is around £1.7m. And they have received £25m in bonuses and incentives since 2019. The profiteering has a significant impact on our bills, which are up 40% in real terms since privatisation.

Any nationalisation pricing should take into account the profiteering and mismanagement that’s already taken place.

Or party Transform has another idea:

The line from Labour is that water nationalisation is too expensive and can’t be done. This is false. Transform have a plan … if a company continues to discharge waste into our aquatic ecosystems we’ll fine them up to their market value, making them worthless and cheap to bring into public ownership.

Water companies dumping sewage into rivers and seas in England more than doubled in 2023 at 3.6m hours of spills, compared to 1.75m hours in 2022.

At the same time, it has transpired that water company owners gifted environment secretary Steve Reed £1,786 in football tickets. These are the people he’s supposed to regulate.

Despite their claims, companies have simply not provided the investment to increase sewage capacity or stop issues like leaky pipes. In England and Wales, water companies lost over 1 trillion litres in leaks in the 2023-24 year.

A regulatory joke – and a Labour joke, too

Ofwat, which is supposed to regulate the water industry, does little but give privatisation a veneer of accountability. The revolving door between Ofwat and water companies is a sign of the farce. 27 former Ofwat directors, managers and consultants work in the industry they were previously regulating.

And the farce only gets clearer. Regulators Ofwat and the Environment Agency have held secret meetings with water industry bosses where they discuss how to “manage” public “perceptions” over increased bills.

Profiteering from the water supply is inherently dodgy. But that takes the biscuit.

Featured image via Virgin Pure – YouTube