Labour’s plan to renationalise water just repeats rusted ideas

Max Young

March 25, 2019

The left has always made decrying profit its mission, with the universal premise that profit is wasteful and could instead benefit “the people”. This line of attack is invariably extended to privately-operated utilities, particularly water.

Indeed, the Labour party’s 2017 manifesto claimed that England’s water provision was “dysfunctional”, and instead proposed a wholly state-run system. However, an analysis of the evidence quickly discounts Labour’s populist agenda.

State-run water was privatised in 1989, and England’s consumers are currently served by 32 private water companies responsible for the provision of water and the management of wastewater.

A trio of independent regulatory bodies oversee the water companies and hold them to account: the Water Services Regulation Authority (Ofwat), the Drinking Water Inspectorate (DWI), and the Environment Agency. This regulatory framework ensures that water companies remain affordable and maintain investment. If companies fail to keep prices low and provide an efficient service, they are not allowed to make a profit.

In the first six years of privatisation, water companies almost doubled the investment from the six prior, from £9.3bn to £17bn. To date, £126bn has been invested nationwide in maintaining and improving assets and services to the benefit of consumers.

Reliable water supply is hugely important, and the percentage of properties at risk of low water pressure fell from 1.33 per cent in 1995 to 0.01 per cent in 2010 – a reduction of over 100 times. Unplanned supply interruptions of over 12 hours fell from 0.33 per cent to 0.06 per cent. Leakages have fallen by a third since 1995, and families are eight times less likely to experience sewer flooding.

The statistics show an overwhelming improvement. Environmental progress has also been staggering. In the 1980s, England was known as “the dirty man of Europe”.

In 1988 over one-third of England’s beaches were below the legal cleanliness standard. Today, fewer than 0.5 per cent of beaches are below standard, with two-thirds classed as excellent. This is largely due to the £30bn of environmental investment by water companies.

Water quality has also markedly improved since privatisation, such that in 2010, 99.96 per cent of water met the DWI’s quality standards. Water companies have been instrumental in cleaning up the environment and providing universally healthy drinking water.

The majority of the public refuse to fall for Labour’s deceitful slogans. According to a ComRes poll carried out last year, 90 per cent of adults trust their water company to provide a reliable service and good water quality. 88 per cent trust their company to deal with wastewater and sewage, and 81 per cent trust them to fix water pipe leaks in public areas.

Only one-third have any confidence in the prospect of local councils and trade unions running water companies. Families recognise that, with an average water bill of just over a pound per day, private water companies do not exploit them. Rather, they provide an effective and reliable service.

This year, water bills are falling by more than four per cent in real terms. Water companies invest at least £8bn each year and plan to commit to more than £50bn over the next five years, an increase of 13 per cent over the current period.

Environmental improvement work is planned for over 8,000 km of rivers. Indeed, according to a Global Water Intelligence report, our water system already outperforms comparable European countries. Germany is the only country that delivers the same quality of service, however, it only does so with 12 per cent higher prices.

We must not return to the dark days of nationalised water, a time when the entire sector was starved of funding, failed to deliver a quality service, and poisoned the environment. If our water provision is renationalised, it will fall prey to politicians from all parties who prioritise short-term solutions to win votes – improvements in water infrastructure are not on that list. We must reject Labour’s outdated ideological narrative which glorifies their discredited past of state-run failures. If we don’t, we will watch our water system stagnate.


Written by Max Young

Max Young is Deputy Editor at 1828.


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