Golden Shot At Regulation

As summer arrives, so too does news of the first hosepipe ban of the season and the threat of more to come.

Despite experiencing the wettest March since 1981, parts of the country are already facing a water shortage. Many point to the effects of climate change and its certainly true, across the world, that access to water is as likely to drive migration as much as wars and despots, but here in the UK the finger is increasingly pointed at the behaviour of Britain’s water companies.

Back in 1989 the Thatcher government, having starved state-owned water and sewerage authorities for years of necessary resources to upgrade what is essentially a public health utility, privatised the industry with the promise of vast improvements. Since that time water companies have paid out £72 billion in dividends while increasing our bills by over 40% but there hasn’t been a single, large-scale reservoir built in England since 1981.

Every year there are hosepipe bans all around the country. They destroy plants and gardens, lovingly tended over years, and enjoyed by so many retired people. They close pubs as they can’t maintain hygiene standards at a time when the hospitality trade is struggling, and they cost farmers dear adding further pressures to the cost-of-living crisis.

Last year the combined bonuses for the chief executives of the ten water companies in England and Wales amounted to £14.5billion. Severn Trent’s chief executive is the best paid in the country at around £3.9M, including bonuses. Severn Trent has a four-star rating from the Environment Agency but still managed to discharge sewage into our rivers 45,000 times.

I understand calls to renationalise the water industry although I doubt a priority for an incoming Labour government should be paying billions in compensation to well-heeled shareholders. It’s true something needs to be done, so why not toughen the regulation and take a golden government share in the industry. A share, which allows us to prioritise tackling leaks, building reservoirs, compensating victims of hosepipe bans and ending the pumping of effluent into our rivers, over dividends for shareholders and bonuses for chief executives.

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