Utility Week

UTILITY WEEK | 6TH - 12TH DECEMBER 2019 | 13 Policy & Regulation state ownership people would say 'crikey, don't you remember how bad it was?'. I thought there would be age polarisation, but it didn't come out like that." He believes the support taps into feelings that big businesses doesn't always support local communities. South West Water and its parent company Pennon Group focused on addressing this feeling when building their business plans. Anglian's chief executive has been with the company since 1989 and witnessed the changes privatisation brought. Peter Simpson thinks the public mood towards nationalisation is linked to failures around pollution and a perception that companies have earned high returns. "Irrespective of whether I agree or not, the perception is there and that's stuck," Simpson says. "A lot of people don't remember or under- stand what it was like when companies were state owned. So, when they're presented with nationalisation it's like 'yeah, why not try it!'" Simpson is, however, cautious not to disregard the underlying grievances of the public. "We've done lots of benchmark- ing against companies that are state owned and English water companies can hold their heads up. But that's not to say you could or should ignore the concerns and what's behind the call for renationalisation." Another way Labour is remaining vague on details for its plans and the timescale it wants, but one voice shouting from every rooˆ op is the pas- sionate campaign group to bring public ser- vices back into public ownership. We Own It believes public sector services should not make a proŠ t for private compa- nies – and it includes under this umbrella utilities, telecoms, rail and transport, librar- ies, education and health care services. In response to the oˆ -made claim that investment will continually be needed to maintain assets and guarantee services, the group suggests that funding from bills would be suŒ cient to cover the costs of the sector. It is, aˆ er all, a proŠ table business, they say. The group's argument is that central funding simply isn't necessary. Ellen Lees, who heads the campaign for water, points out the improvements the sec- tor has made under privatisation have been at the behest of industry regulators and directives from the European Union. She says these improvements were not made out of a sense of good will or wanting to do the right thing: "They are doing it because they are told to." She argues that too much money from customers' bills is spent on paying the inter- est on debt accumulated by the companies. "This is all money we could save if national- ised," Lees says. "Companies charge customers extra money every year to pay the interest on debt that only exists to pay their shareholders. They call themselves a successful industry, but they're only make proŠ t because they are borrowing so much." Lees says Ofwat has not acted in cus- tomers' best interests to prevent companies getting away with "a complete scam" of accumulating debt. "We can't rely on Ofwat to make sure the industry works. It will respond to a serious threat – or opportunity – of nationalisation but it doesn't act in the interest of customers in the way that a regulator should do. In the past 30 years it has failed to represent service users' interests." Lees also feels public ownership would boost perceptions of fairness, a point repeated as an underlying argument for renationalisation. "If you knew all the money you are pay- ing on your bill was going into improving the service and not paying ridiculous amounts of interest and dividends for shareholders in far-– ung places, you'd absolutely feel more satisŠ ed with the service. "Trust is a funny one with water. As long as water is coming out the tap, companies are doing their job and you can trust that will happen, but sometimes companies use that to in– ate their own success. But if you break it down to speciŠ c questions like, 'do you trust your water company to pay appropriate tax?' then Scottish Water fared better than the English water companies." The position that bills would cover the level of investment needed across the sector to maintain infrastructure as well as building new assets is rejected by Southern Water's Ian McAulay. He says: "We are doing long- lived infrastructure, multi-generation infra- structure – bills simply do not fund all the investment." McAulay simultaneously recognises the importance of not trying to simply silence such a view point. "The challenge isn't for us to dispute that but for them to provide evidence that sup- ports that. We should have these types of debates, it's important, but it must be done with facts, evidence and science and taking the holistic picture into account as well," he explains. Addressing the underlying issues Regardless of whether or not a Labour gov- ernment is elected and then how or when continued overleaf "A lot of people don't remember or understand what it was like when companies were state owned." Peter Simpson, chief executive, Anglian Water "We are doing long-lived infrastructure, multi-generation infrastructure – bills simply do not fund all the investment." Ian McAulay, chief executive, Southern Water "Going back to a nationalised system would be a disaster." Colin Skellett, chief executive, Wessex Water

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