Labour targets water industry first for nationalisation

John McDonnell has lined up water as the first industry Labour will bring back into public ownership.

The shadow chancellor of the exchequer used his keynote speech at today’s (24 September) Labour party conference to unveil the party’s plans for a publicly-owned water system.

He said that it would be run by local councils, workers and customers under a new ownership model that seeks to avoid the top down, centrally control that characterised post-war nationalisation.

McDonnell said: “Water bills have risen 40 per cent in real terms since privatisation. Water companies receive more in tax credits than they pay in tax. Each day enough water to meet the needs of 20 million people is lost due to leakages.

“With figures like that, we can’t afford not to take them back. But let’s be clear, nationalisation will not be a return to the past.

“We don’t want to take power away from faceless directors only to centralise it all in a Whitehall office, to swap one remote manager for another.”

He said that together with shadow business secretary Rebecca Long-Bailey, he is launching a large-scale consultation on improving democracy in the public services.

And McDonnell said there would be “unprecedented openness and transparency” in how the water industry will be managed.

“We are ending the profiteering in dividends, vast executive salaries, and excessive interest payments. Surpluses will be reinvested in water infrastructure and staff, or used to reduce bills. Real investment will allow the highest environmental standards.”

Responding to McDonnell’s announcement, a Water UK spokesperson said that it had not answered any of the “big questions” about the risks involved in a government taking over and running water companies.

“There’s no explanation of how a government-run water industry would match or beat the ambitious plans for the future that we have set out, and there’s still the serious risk that water would be a long way down the list of priorities for government funding, far below health and education.”

McDonnell also announced over the weekend that Labour would set up a dedicated public ownership unit in the Treasury.

McDonnell also promised to assess government spending decisions against tackling climate change and protecting the environment.

His speech follows yesterday’s (23 September) publication of Labour’s environment manifesto, entitled “The Green Transformation”.

It reiterates the party’s pledge in last year’s general election manifesto to upgrade four million homes to energy performance certificate band C in the first term of a Labour government with £2.3 billion per year worth of investment to provide financial support for households.

It also says that Labour would ensure that 60 per cent of the UK’s energy comes from low-carbon or renewable sources within 12 years of coming to power. This effectively represents a watering down of the pledge in last year’s manifesto which said this goal would be achieved by 2030.