Labour has announced plans to nationalise the water industry, and warned that senior executives could be sacked.
Shadow chancellor John McDonnell’s plans were shared in a press release sent after his speech, and a document on Labour’s vision for a “modern and transparent publicly-owned water system” was published.
“Water bills increased 40% in the 25 years after privatisation,” it reads.
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“Over the last ten years, the English water companies have paid out more than £18 billion in dividends to shareholders.
“This is money that could have been invested instead, or used to reduce bills by around £100 a year per household, the equivalent of a 25% reduction.”
'Dramatically reduced salaries' for bosses
Under Labour’s plans, ownership of existing water and sewerage systems would be transferred to regional water authorities (RWAs) made up of local councillors and representatives from trade unions, environmental and consumer bodies.
Any profits would be reinvested into the system or used to reduce bills.
The press release states that director and executive roles would be re-advertised on “dramatically reduced salaries”.
“All staff will transfer on a TUPE basis [meaning they retain the rights they have in their current position if transferred to a new employer] in the same roles, except for senior executives and directors, whose posts will be re-advertised on dramatically reduced salaries capped by our 20:1 pay ratio policy,” it reads.
In June, the GMB union branded water bosses “fat cats” and said they “trousered” £58 million over the past five years in “salary, bonuses, pensions and other benefits”.
It criticised Severn Trent boss Liv Garfield for her £2.4 million salary, which increased by 50% between 2013 and 2017, and United Utilities’ Steve Mogford, whose £2.3 million salary increased 49% in the same period.
Spokespeople for Severn Trent and Unitied Utilities defended their pay, saying it was linked to “targets”
GMB launched its Take Back The Tap campaign the same month with a petition to Michael Gove to return water to public ownership.
Water UK, a membership organisation representing major UK water providers, responded saying “it is far from obvious that it [water] would be a priority for Ministers” if it was nationalised.