Water nationalisation support plummets after pension plot

Less than 30 per cent of people would support water nationalisation if Labour cut pensions to facilitate the move, a survey commissioned by Water UK has found.

Labour has long had the water industry in its sights as the first utility to be nationalised should it win a general election.

The ComRes poll found only 29 per cent would support water nationalisation if it cut pensions in the way planned by Labour.

This compares to 83 per cent support for water nationalisation often quoted by supporters of public ownership from a poll carried out in summer 2017 – before details of the party’s plans emerged.

As well as finding the low levels of support for a government take-over, the survey also discovered that only 22 per cent of the public supported moving in on pension schemes.

Last week it emerged that Labour planned to take public ownership of water companies for less than half the market value, prompting concerns from within the sector.

Furthermore research by the Global Infrastructure Investor Association (GIIA) shows there are more than four million public sector funds invested in the water industry in England. They face losing potentially thousands of pounds if the plans go ahead.

The GIIA has identified 67 UK pension funds with investment in the English water sector, with over four million members of public sector schemes and almost two million in private sector schemes.

Funds affected include the 158,099 members of the UK Mineworkers Pension Scheme, the 370,142 people in the Greater Manchester scheme for local authority workers, and the 134,339 members of the Merseyside local authority pension fund.

Meanwhile around 350,000 workers at Tesco and more than 300,000 BT workers would also be affected by the impact of nationalisation, the GIIA found.

Responding to the figures Water UK chief executive Michael Roberts said: “More and more people are realising that spending tens of billions of pounds of taxpayers’ money to take over an industry that’s already reducing bills, increasing investment and cutting leakage doesn’t make much sense.

“When you add in the devastating impact on millions of pensioners it turns a bad idea into a deeply damaging one.”

According to independent thinktank the Social Market Foundation (SMF), nationalisation would cost the British taxpayer £90 billion upfront.

The National Infrastructure Commission meanwhile has said that significant ongoing investment is needed in the UK’s water infrastructure, estimated by the SMF to be over £100 billion in the next decade, prompting concern that other public services will have to compete for government funding.

Earlier this week Labour unveiled its plans to nationalise the energy networks with a document entitled Bringing Energy Home. 

Under the plans the transmission and distribution systems could be broken down into “multiple” structures.

As with the water sector proposals, the plans could also see investors not paid the market rate for their assets.

During a recent interview on Radio 5 Live’s Pienaar’s Politics programme, the shadow chancellor of the exchequer John McDonell rejected the suggestion that his party’s public ownership plan would be successfully challenged in the European Court of Human Rights.

Such a case could be mounted on the grounds that failure to pay full market value would represent an interference with property rights, which are protected by the European Convention on Human Rights, according to an analysis published by Clifford Chance last year.

The Labour Party has been contacted for comment.

Source: Research by Global Infrastructure Investor Association