Your bill could be rising by a whopping 44% (Picture: Chris Ratcliffe/Bloomberg via Getty Images)
It is deplorable that if private water companies get their way, your bill could be rising by a whopping 44% – all while they’re still paying their shareholders dividends.
That would mean an extra £183 coming out of your pocket over the next five years.
Regulator Ofwat has stepped in and said it wants firms to limit rises for households to an average of £19 per year (which is 21%) until 2030.
Of course, the water companies have warned that the regulator has ‘got this wrong’ and that increase won’t be enough to sufficiently address problems like sewage leaks.
The proposed price hikes can be challenged by the water firms, with a final decision due at the end of the year. But I believe these demands should not be accepted and this reward for failure must not continue.
That’s why the Green Party has called on new PM Keir Starmer to take water companies into public hands. The provision of such a basic human need as water should not be based on profit.
Public ownership is a matter of both social and environmental justice. It is also a pragmatic necessity.
The Green Party has called on new PM Keir Starmer to take water companies into public hands (Picture: Alishia Abodunde/Getty Images)
Payouts in dividends to shareholders of water companies between 1991 and 2019 amounted to £57billion. This is nearly half the amount spent on investment in infrastructure (£123bn) over the same period.
With water back in public hands, the Government can invest in crumbling infrastructure and in cleaning up our rivers, waterways and coastlines, without such colossal sums leaking out to shareholders and spilling over into fat-cat salaries.
But how feasible is it to take water companies into public ownership?
About 90% of water services around the world are publicly owned, but over 90% of the English water companies are owned by international investors, private equity funds, and banks, according to lobbying group, We Own It.
Taking back control of water is largely a matter of political will. If the Government committed to this course of action, it could use existing regulations to bring failing private companies into becoming publicly owned and publicly accountable.
For example, the water regulator has powers to stop the payment of dividends if such payments risk the company’s financial resilience. They can also take enforcement action against water companies that don’t link dividend payments to performance.
I say let them sink (Picture: Carla Denyer)
If such rules were enforced, the attractiveness of investing in these companies would evaporate. And without investment from the private sector, these private monopolies would soon disappear down the drain.
Indeed, we regularly hear private water companies bleating on about how, without a cash injection from investors, they will fail to stay afloat. So I say let them sink.
In terms of the cost of bringing the water companies into public ownership, Environment Secretary Steve Reed says it would cost taxpayers billions. But given the dire economic health of much of the industry, it may only be necessary to pay shareholders a small level of compensation.
A series of decisions by the UK and European appeal courts affirm that the level of compensation could fall within the discretion of parliament.
And Labour governments have done similar things in the past. In 2002 under Tony Blair, Railtrack was taken into government hands, forming Network Rail.
Similar powers exist for the Government over water companies.
The new Government has pledged to force water companies to tackle illegal sewage dumping into our rivers, lakes and seas. It has said that firm action should have been taken much earlier to ensure money was spent on fixing the sewerage system, not syphoned off for bonuses and dividends.
Quite so. But it still seems content to let private companies continue to be rewarded for failure and leave our water and sewage services to continue to be provided by private monopolies.
With people struggling to afford to eat and heat their homes, we cannot allow the private companies to keep hiking bills. Nor can we allow the scandal of filth in our waterways to continue.
We won’t stop sewage flowing into our rivers and profits into shareholders’ pockets without real change.
There is an obvious answer where both people and the environment are the winners: bring the water companies back into public hands to end the profiteering, drive down bills and protect our rivers, waterways and coastline.
Carla Denyer is co-leader of the Green Party of England and Wales and MP for Bristol Central
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