Labour and the Water Industry Nationalization Plans
Labor has asserted that it is not toning down its plans for nationalization irrespective of claims raised by the chief of a water company that there has been a discussion with the opposition leaders concerning mutualisation-style. Labor has voiced statements concerning re-nationalizing water as well as energy and rail amidst claims by FTSE 250-klisted utility that the party was seeking other means of obtaining control over the industry.
Susan Davy who is Pennon’s Chief financial officer which owns South West water said that she had noted a more calm discussion with the party irrespective of the party speaking publicly about the full nationalization. She notes that the party has been consistent in their media statements but behind the scenes, it is easy to see the differentiation in what they are talking about. Davy also emphasizes that the interesting bit of Labor policy is that they are drilling down much more. Thus, the preference seems to be moving towards mutualisation, a model that allows customers to be owners.
A spokesman of the party declined to indicate the areas covered in the ongoing discussions with leaders in the water industry. He only reiterated that as announced in the general elections, there will be taking of public ownership of water by the next labor government through the issuance of bonds in exchange for shares in the companies. He emphasized that the party was not considering on mutual terms. Additionally, John McDonnel, the shadow chancellor has promised complete, permanent as well as cost-free water re-nationalization as well as energy and rail industries if labor wins in the next elections.
Susan Davy who last year received a pay package of more than £922,000 argued that the water industry aimed at making an impression on Labor concerning the fact that the majority of the shareholders in the water companies were owned by the public. She added that indications from their model as well as that of United Utilities and Severn Trents, seventy percent of the shareholders were pension funds, charities and UK employees.
Davy also added that Pennon was in agreement with Labor concerning the say of the greater public in water management through the WaterShare initiative where an independent panel examines the performance of Pennon as well as the financial benefits which are shared with customers. Davy observes that the nationalization cost would be a major challenge as per the findings of think tanks Social Market Foundation and the Centre for Policy Studies. Davy ends by saying that they are creating a body of evidence to enable Labor to see where they are coming from and not just putting across the ideas against nationalization.