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Thinking About Water.

July 1, 2022 3:02 PM
By Luigi Gregori Liberal Democrat Parliamentary Spokesperson for NW Hampshire in Andover Advertiser

Water companies tend to hit the headlines when we hear about yet another sewage scandal. As monopolies we cannot switch suppliers and look for a better deal or service. However, things have not been going well. Data from the Environment Agency shows that in 2020 untreated sewage was pumped more than 400,000 times into UK rivers and seas. In 2021, the water regulators Ofwat and the Environment Agency announced an investigation into sewage treatment works following claims of lawbreaking. In March this year enforcement action was initiated against five companies and more are likely to follow. UK water companies have been fined more than £400 since 2010. More than half has been paid out by our local supplier Southern Water due to serious failures in sewage treatment and deliberate misrepresenting of performance data. These facts were lost on the Tory MPs who voted against criminalising companies who trash our environment.

England's water market is unique. In 1989 the government sold the Regional Water authorities in England and Wales to private firms for £7.6 billion. Concurrently, the government wrote off debts of £5 billion and provided another £1.5 billion pounds of public funds. Basic arithmetic suggests the actual cost was therefore £1.1 billion. Yet the University of Greenwich has calculated that since privatisation the water companies have paid out more than £2 billion a year to shareholders. This explains prices and the lack of infrastructure replacement. No other country has adopted the English system of private water companies. Most countries including the USA run water through the public sector. Most of the English water companies are owned by private equity firms whose primary role is to maximise profits out of an asset. Water company behaviour is equivalent to that of the landlord which seeks to maximise rents while spending the least possible on maintenance or other work.

What does this mean for us? If we continue with the current ownership model, the regulators who are our only protection need to be empowered and improve their game. This is something our Tory MPs do not understand. We should reconsider the ownership model. Both Scotland and Wales have publicly owned companies where residents pay less with less pollution. Demand Better!