Bill to nationalise polluting water companies blocked by UK Government

A proposed law that would take failing water companies back into public ownership if they repeatedly pollute Britain’s waterways has been blocked.

The Government did not offer its support to Clive Lewis’s Water Bill, which included a series of measures to tackle water pollution, including nationalising repeat offenders.

The private member’s bill from the Norwich South Labour MP would have meant any firms that had three major sewage spills would have their licence terminated and be nationalised, without owners getting compensation.

It would also compel the Government to ensure water is affordable, with the provision of free water “where appropriate”.

Committed

However environment minister Emma Hardy said it would cost more than £200 billion to renationalise the water industry. But Ms Hardy added the Government was committed to improving water quality and the wider industry.

MPs debated the Bill for more than four hours on Friday, but Mr Lewis asked for it to be adjourned until July 4 after failing to get Government backing.

She said: “(Mr Lewis) says we can do it better, we can do it better, we absolutely can. This Labour Party was elected on a manifesto for change, it was elected with a plan for change. The Labour Party was created to serve working people and the working class, and it’s our duty to do that.”

She added: “So I want to make one thing clear if nothing else, this Government is absolutely committed to improving the performance of the water sector.”

She said the Department for Environment, Food and Rural Affairs estimated it would cost £99 billion to buy capital assets, as well as £104 billion for already-announced investment in the water system.

“You would be talking about the £104 billion of investment over the next five years, plus the cost of acquiring assets, so I just wanted to be really clear about the figures we’re using.”

Legacy

Mr Lewis had introduced his Bill by criticising the legacy of private ownership and said his reforms would send failing owners “into the sunset without a penny in compensation”.

He said: “Under the Bill, if a water company breaches the terms of its licence with a major sewage discharge it can forget shareholder payouts and piling on more debt.

“Do it twice and you’re in the last chance saloon. Three strikes and you’re out. Licence terminated, on your bike, and those price-gouging, asset-stripping, river-killing, vulture-capitalist outfits, they’ll be rolled into the sunset without a penny in compensation.

“Oh and those water infrastructure they’ve been sweating for private gain, back into the public realm thank you very much.”

His Bill would have required the Government to publish a water strategy, establish a commission that would examine water ownership and value for money, and set up a citizens’ assembly on water ownership.

Mr Lewis was critical of Margaret Thatcher’s privatisation, telling MPs: “Thatcherism’s shadow looms dark over our water system today.”

However, he added: “Yet whether we see ourselves standing on her shoulders or trapped in her shadow, one thing is undeniable. She proved that wealth can be made differently, and if it can be made differently once it can be made differently again.”

Water companies have faced increased pressure in recent years, amid increased awareness of pollution being discharged into rivers and seas at the same time as a lack of investment in infrastructure by bosses.

Bills have increased for many consumers as companies scramble for extra funds to pay for improvements.

New Environment Agency figures released this week showed storm overflows spilled sewage into England’s rivers, lakes and coasts for the highest number of hours on record.

Less than a fortnight ago Thames Water cleared the latest hurdle in getting a £3 billion rescue loan, which will allow it to operate for another year and restructure its debt of at least £16 billion.

Mr Lewis was critical of the Government’s Water (Special Measures) Bill, saying it had been diluted and did not go far enough.

Under the Government’s Bill, which was given Royal Assent in February, company bosses could face up to two years in jail if they obstruct investigations and regulators will have strengthened powers to ban bonuses if environmental standards are not met.

“It doesn’t live up to what was promised, and unfortunately it doesn’t live up to what is needed. It certainly, I’m afraid, doesn’t live up to its name. It’s a start, but it’s not a solution,” he said.

Appealing

Labour former minister Dame Meg Hillier said: “The nationalisation argument sounds appealing to many on the face of it, but there is a cost, and it’s not a hidden cost.

“It’s a cost to those people who have bought shares in good faith, those pension funds that are investing, and there is a cost and upheaval to turning around an organisation.”

Independent MP Jeremy Corbyn (Islington North) said water, which is “an absolutely essential and basic need”, should be “completely in public hands”.

Labour MP Alison Taylor (Paisley and Renfrewshire North) pointed to water being publicly owned in Scotland.

Ms Taylor said: “Since privatisation water bills in Scotland have been consistently lower than England, and customer satisfaction consistently highest for Scottish water with all other water companies trailing behind.”