A recent Parliamentary debate in the House of Commons on the future of the UK water sector saw calls for the water companies in England to be based on the Scottish Water public sector model or the Welsh Water ownership model with “democratic public ownership” via new consumer and employee trusts.

Gareth Thomas (Harrow West) (Lab/Co-op) who launched the debate, said although Welsh Water did not pay dividends to shareholders it operated in the private sector, with an ownership model that forced it “always to operate in the interest of its customers.” He told MPs the water company had changed the way in which it raised finance in order to reduce the cost of credit, pointing out that Welsh Water now has the strongest credit ratings in the water industry, thereby reducing its financing costs and enabling even more future investment in its infrastructure and services. Changing the private ownership model and the potential renationalisation of the water companies were among the key issues discussed in the debate which took place in the House of Commons on 22nd January.

Opening the debate on 22nd January on the future of the water industry in England and Wales, Gareth Thomas said: “Margaret Thatcher’s decision 30 years ago to privatise our water industry has created an expensive, unaccountable and unfair system. No other country has a fully privatised system of water and sewage services with so little competition. The resulting monopoly businesses are overseen by a woefully weak water regulator. Unsurprisingly, the consumer voice in England carries little weight against the interests of distant investors, whose decisions have seen water bills rise by 40% above inflation since privatisation.” He told MPs that water companies have become “a desirable global financial commodity, bought and sold by big banks, international infrastructure investors, pensions and sovereign wealth funds.”

It was “striking” that total payments to shareholders were very similar to the total outstanding debt burden of privatised water companies, he added, with at least £48 billion in payments in the past 30 years and at least £51 billion in total debt.

“In the past Ofwat has not demanded enough investment from water companies” 

Click here to read the House of Commons debate in full.

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