Water, water everywhere, but its too expensive to drink

This column by CPO co-founder Neil Clark ,on England's great water privatisation rip-off, appears in the Morning Star.

The Crazy Gang. The Keystone Kops. The Marx Brothers. Just three of the all-time great comedy troupes. To which we need to add another name - the Institution of Civil Engineers. 


Last week this bunch of comedians issued a report which claimed that water in Britain is too cheap and recommended the introduction of compulsory metering. 


It would be a hilarious, side-splitting joke if only the subject under discussion wasn't quite so serious. 


In England water prices have risen by an average of 5.7 per cent since April, nearly double the rate of inflation. 


More and more people are finding it harder to pay their water bills. Research by the Consumer Council for Water has found that one in seven of all customers feel their charges are now unaffordable. 


Far from being too cheap, water in England is actually too expensive - and the reason is a simple one. It's called privatisation. 


You can read the whole of the article here.

Neil Clark: Why it's time to renationalise England's water

You can listen to an interview with Neil Clark, co-founder of The Campaign for Public Ownership, on BBC Radio Newcastle, here. The discussion starts at around 10 minutes into the programme.

71% say renationalise the water industry

The Sunday Express reports:

CALLS to renationalise the water industry have risen as a summer of drought looms despite heavy rain. 


Seven out of 10 voters want the control of water supplies taken out of the hands of major companies, many foreign-owned, and put back into public ownership.


After a month of constant rainfall and even flooding failed to lift drought restrictions in many areas, there are strong signs the public is increasingly frustrated with the performance of private companies and the Government at tackling the water crisis. 


You can read the full article here. 


If you live in England, then please write to your M.P. asking whether or not they support renationalisation of England's water.

Water bosses pocket huge bonuses and hand shareholders massive payouts

The Daily Mail reports:

Four million pounds in bonuses have been paid to the directors of water firms – despite their failure to repair leaks which allow 300million gallons to be lost every day.

All but one of the companies, which today brought in hosepipe bans for 20million customers, handed rewards to their board members in the last financial year.

These include £2million for three executives at Britain's largest water supplier Thames Water, whose highest paid director, understood to be chief executive Martin Baggs, took home £1.67million in 2010/11.

More on this story here.

It surely is time to renationalise water and end this great privatisation rip-off.

Neil Clark: Renationalise English water

This article, by CPO co-founder Neil Clark, appears on the The Guardian newspaper website.

The obscene commodification of a natural resource has gone on long enough, ripping off ordinary people


Here we go again. In the past 12 months, we've had significant hikes in our gas and electricity bills (not reversed by recent cuts due to a fall in wholesale prices) and above-inflation increases in train fares – which are already the highest in Europe. Now it's time for the water companies to put the boot in.


Ofwat has announced that average household water and sewerage bills in England and Wales are to increase by an average of 5.7% from April. As in the case with the rail fares, we're told that the reason that prices are rising is to enable more "investment" by the water companies. But a closer inspection is highly revealing.

You can read the whole article here.

Thames Water customers face inflation-busting price increases

The Evening Standard reports:

Millions of Thames Water customers face inflation-busting increases in their water bills over the next five years.

Bills will be allowed to rise by 3.3 per cent more than the cost of living between next year and 2015, regulator Ofwat said today. In today's prices they will rise from an average of £303 to £313, with the biggest annual increase coming in 2012.
Of the major water suppliers, only Northumbrian and Southern will increase bills by more. Across England and Wales bills will rise by one per cent less than inflation over the five-year period.

However, Thames Water initially asked Ofwat to approve a far steeper rise - by 16 per cent more than inflation, to £356 in 2009 prices.

Privatisation on parole

This article by CPO co-founder Neil Clark, on the fightback against privatisation in Hungary, appears in the New Statesman.

Twenty years ago, Hungary's decision to open its border with Austria triggered the dramatic events that led to the fall of communism in eastern Europe. But today the country is fighting the neoliberal economic model imposed after 1989.

In Pécs, a historic city in the south, the local authority has reacted to public anger over soaring water bills by sending security guards to seize the local waterworks from the French company Suez Environment and to prevent its management from entering the building.

A 48.05 per cent stake in the city's water company was sold to the French multinational, which supplies water to 76 million people worldwide, in 1995. The company also receives an annual "management fee" of 120 million forint (£419,000).
The mayor of Pécs, Zsolt Páva, has accused Suez of profiteering and a lack of transparency, and the town cancelled the contract with effect from the end of September. Suez is countering with legal proceedings. "If 20 commandos arrive at 3am and occupy somewhere, that is not a European solution, and is undoubtedly illegal," a company manager said.

But Suez, whose turnover last year was €12.4bn (£11.5bn), should not expect much sympathy from local people, struggling to make ends meet in an economy where real wages are forecast to fall by up to 3.5 per cent this year. In a poll, 94 per cent said they supported the local authority.

It's not the first time the French company's record has been challenged. The pressure group Food and Water Watch charges Suez with a "range of abusive practices that place profit before the human right to water", including refusing to extend services to poorer areas, cutting off water if people are unable to pay, and "raising rates to unaffordable levels".

Opposition to privatisation is high, so, with a spring election looming, even neoliberal politicians are having to change their tune: in June, Prime Minister Gordon Bajnai said he would prevent privatisation of the water supply. Multinationals may not like it, but 20 years on from capital's conquest of eastern Europe, public ownership, not privatisation, is the vote-winner.

Water bills to rise by 17%

From the Daily Mail:

Households face rises in their water bills of 17 per cent over the next five years.

The increase comes as Thames Water today reveals profits surging to £605million - the highest for a British water supplier.

The company, which has already put up bills by a third in the past five years, said average annual household water bills are to rise from £283 to £331 between next year and 2015.

Londoners will be hit hardest next year by water bill increases of 10.5 per cent, according to the company's five-year business plan.

English Water, anyone?

This article about the neoliberal Adam Smith Institute's call for water in Wales to be privatised is by the pro-public ownership blogger Charlie Marks and appears on his blog. The CPO thanks Charlie for allowing us to reproduce his article in full here.

The Stonemason has blogged about the eagerness of the Adam Smith Institute to see Glas Cymru (which owns Welsh Water) subjected to the “disciplines of private sector ownership”.

While it’s no surprise that they are calling for a successful publicly-owned company to be used as a cash-cow for shareholders, I feel I must unpick this particular assumption.
The issue of “discipline” relates to the principle-agent problem. How can those running a company be held accountable to its owners?

The Adam Smith Institute may argue that privatisation has been a wonder - but this is only true for shareholders. And some of these shareholders are ordinary people who are facing huge bills because of prices that go up when costs go up and stay up even when costs go down - yet they cannot as shareholders demand this of the company.
Because Glas Cymru is a company limited by guarantee its purpose is not to maximise the dividend paid to shareholders but to meet its objectives of providing high quality water and sewerage services to customers. This year each customer of Glas Cymru will recieve a dividend of £21.

Now, I’m not saying that it has the most socially-just model of ownership.

The company’s workforce - and the employees of contractors - should be regarded as stakeholders just as much as consumers. The objective of high-quality service cannot be met if workers are disempowered; good wages, working hours, and democratic representation ensure that high standards are maintained.

The remit should also include efficient use of energy and minimising any negative effects on the environment or natural wildlife.

Though Glas Cymru may not be perfect, it looks a damn sight better than what we have in England! We are being told that the only way to lower our bills is to have the profiteering water companies competing with each other. We have this with our gas and electricity suppliers - but do our bills come down? No, they compete with each other to squeeze as much money out of customers!

Privatisation has been a disaster. Public assets sold off at knock-down prices to the friends and sponsors of the governing party (Tories, now New Labour). Prices have been allowed to skyrocket -natural monopolies are milked for profit by colluding suppliers in gas, electricity, and railways. Rather than seeing greater private investment in our railways, more public money is invested in rail than ever before!

The likes of the Adam Smith Institute can try all they like to convince the public of the benefits of handing public resources over to big businesses. Their nonsense is only heeded by those politicians hoping to get cushy non-jobs in business after they leave office.

We need to return the privatised utilities to public ownership and democratic control, with the involvement of workers and consumers in the process of management.

Surveys of public opinion have never found a clear majority in favour of privatisation - and with the credit crunch being perceived as resulting deregulation and demutualisation, more and more people will begin to see the necessity of reversing the neoliberal era.

Privatisation of water and sewage services did not take place in Scotland or Northern Ireland. Scottish Water is owned by the Scottish government and both the incumbent nationalist party and the opposition Labour Party are committed to the company remaining in the public sector. The Scottish Tories are for privatisation, but are at pains to point out they don’t want what has happened in England! Northern Ireland Water priovides water and sewage services in the six counties; like Scottish Water it is still part of the public sector.

So, there’s Northern Ireland Water, Scottish Water, Welsh Water - how about English Water?

Water giants gush profits as bills soar

From The Sunday Express, 1st June 2008

MILLIONS SEE HIGHEST-EVER CHARGES AS FIRMS RAKE IT IN

Major water companies will this week unveil profits estimated at more than £1bn just weeks after anouncing inflation-busting price rises for householders. Quoted groups United Utilities, Northumbrian Water, Pennon and Severn Trent, which serve millions, are poised to post pre-tax profits adding up to an estimated £1.054 billion. This will not please consumers whose water costs have risen. This year's bills will be 6% up on last year's, at £330 on average. Since the water industry was privatised in 1989, householders have been clobbered with an increase in real terms of 42%.

Water company given record £35.8m fine for 'lying' to industry watchdog

From The Daily Mail, 9th April 2008

A water company has been fined a record £35.8million for lying about its performance and customer service.

Severn Trent, one of the UK's biggest water suppliers, knowingly changed its customer service data to cover up its true performance.
The company admitted misreporting its water leakage levels in 2001 and 2002, which implied it was working to a much higher standard than was actually the case.
This data was then used by industry regulator Ofwat to determine how much the company should be allowed to raise its prices until 2010.
Ofwat concluded that, had the deceit not been discovered, householders would have been overcharged by £42million.

The watchdog considered the lies so shocking that it referred the case to the Serious Fraud Office for a criminal investigation.
Ofwat has insisted that the entire fine is paid for by the company and its shareholders and not passed on to the eight million customers.
Separately, Severn Trent faces a further fine and a criminal conviction for covering up its failures to tackle leaks from its pipes.

Regina Finn, Ofwat's chief executive, said: "This sends a clear message to the rest of the water sector. "Ofwat will protect consumers and companies must comply with their legal obligations or pay the price."

Tony Wray, Severn Trent's chief executive, said: "Those who were responsible for the customer relations mistakes are no longer with Severn Trent and we apologise to our customers for their failings."

Other water companies have also faced heavy fines in recent months for deliberately covering up customer service failures.
In December, Southern Water was fined £20.3million while Thames Water faces a £12.5million fine, both for providing misleading information to Ofwat.