Utility Week

6 | 1ST - 7TH FEBRUARY 2019 | UTILITY WEEK A UtilityWeek c ampaign Campaign debate Y ou have to go back to the days of "Cedric the Pig" to recall a time when utilities were last so firmly in the public firing line. The unions used the pig, named a•er Cedric Brown, to pillory the then chief executive of British Gas over the size of his pay hike in the mid-1990s when the recently privatised company was cutting jobs. Now the issues are high prices on the part of energy companies and excessive profits in the water industry. And it is this increased focus on the sector that has prompted Util- ity Week to launch the New Deal for Utilities campaign, which seeks to promote a debate about the future of the sector. One of the drivers of the campaign has been the Labour party's plans to bring utili- ties back into public ownership if elected to form the next government. This poses an existential threat to some of Britain's best known companies. The opposition's plans are popular, exclu- sive research carried out by Harris Interac- tive for Utility Week shows (see Utility Week, 18 January). A majority of consumers sur- veyed back some form of public ownership. When asked who should own utility compa- nies, 37 per cent said central and 14 per cent local government respectively. Just 14 per cent plumped for private ownership. And public ownership looks like a vote winner for the opposition. Over a third of those polled said Labour's pro-public own- ership stance makes them more likely to vote for the party, nearly three times the 11 per cent who replied "less". Most (55 per cent) shrugged and said it would make no difference. Exactly half of respondents believe nationalising utilities will deliver cheaper services, while 36 per cent would expect to see them improve. Shadow chancellor John McDonnell has said that an incoming Labour government would prioritise restoring public ownership over water and rail. Last autumn's party con- ference saw the publication of a policy docu- ment entitled "Clear Water", which set out Labour's emerging thinking. The call for nationalisation is one element in a wider debate about the future direction of the party's policy on the sector. A union source says: "Work is being done on vari- ous options across the spectrum. There are a number of individuals with strong views in the party." One of these is former hard le• MP Alan Simpson, who advises party leader Jeremy Corbyn on environment issues and is a pas- sionate advocate of green energy. Given the timing of Labour's plans, the questions are understandably most urgent for the water industry. A spokesman for Water UK says: "There are still huge ques- tions that are not answered like how the new bodies would run and be financed." "There are still huge questions that are not answered like how the new bodies would run and be financed." WATER UK Scott Corfe, chief economist at the Social Market Foundation, agrees: "It looks quite vague about what exactly they want." However, broad agreement appears to exist across Labour on the desirability of bringing water back into public ownership. During a debate on the future water indus- try in parliament last week, all of the party's MPs who spoke supported the restoration of public ownership. They included moderates like Gareth Thomas, who outlined proposals for co-operative ownership of the sector. The debate set out the pros and cons of the industry's track record since privatisation. Thomas highlighted figures showing that the UK's water companies have each paid out an average £200 million in dividends a year, making a total of £2 billion a year. Research, carried out by the trade union-backed Public Services International Research Unit at Greenwich University, esti- mates that £48 billion of dividends have been paid out over the past 30 years. Over the same period, the same companies have taken on "at least" £51 billion of debt. Thomas also said investment in water supply infrastructure had fallen by about 10 per cent over the past ten years. Richard Benyon, the former water minis- ter, countered that the industry's investment needs had been "absolutely ignored" when it was in public hands, and that £150 billion has been ploughed in since privatisation. In addition, he said customers are now five times less likely to suffer from supply interruptions and leakage has reduced by a third since the 1990s. He also said that households are 100 times less likely to have low water pressure. For its part, Ofwat estimates that the combi- Is there a case for nationalisation? Labour has hit a chord with the public in calling for the nationalisation of utilities. In the third week of our New Deal for Utilities campaign, David Blackman asks, how strong a case does it have? JOIN THE DEBATE Follow our campaign online at: www. utilityweek.co.uk on our Twitter @Utility Week and on LinkedIn, #NewDealForUtilities. To share your thoughts or for more details contact acting editor: suzanneheneghan@fav-house.com

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