British Association members pour cold water on renationalisation

A survey of British Water members on the Labour Party’s plan to renationalise the water industry shows that a majority believe it will negatively impact the supply chain and customers.

On overall impact on the supply chain, 78 per cent of respondents said they believed future investment would be reduced or significantly reduced, while 14 per cent believed it would increase. 64 per cent said they believed the number of people employed in the supply chain would be reduced.

A similar number, 66 per cent, believe that standards of service would be reduced or significantly reduced, but only 39 per cent believe that water quality at the tap would be reduced. Some 40 per cent of British Water’s 200+ member companies responded, with some 55 per cent saying they believed their business’ turnover and profitability would be reduced or significantly reduced.

One respondent said, “I think there would be a lack of investment followed by a deterioration in assets and environmental performance. I think that drinking water standards would be maintained by hook or by crook.” Another said it would be useful to consider other models such as not-for-profit Dŵr Cymru Welsh Water. 

Shadow chancellor of the exchequer, John McDonnell unveiled the Labour Party’s intention to bring the UK’s privatised water companies in England and Wales back into public ownership in a conference speech in September 2018. He said that the renationalised industry would be run by local councils, workers and customers under a new ownership model.

British Water UK director Paul Mullord said, “Changes in the ownership structure of the water industry would inevitably have an impact on British Water members. The risk coming from renationalisation is that levels of investment would fall, reducing opportunities for the supply chain, especially small and medium-sized enterprises, and potentially impacting on levels of service for customers.

“While less than 40 per cent believe water quality into people’s homes would be affected, a majority of our members have expressed concern about the impact on their businesses, jobs and levels of investment.”

Of the 40 per cent of British Water member companies that responded, 37 per cent were consultants, 30 per cent were contractors, 29 per cent were manufacturers and suppliers, and four per cent were water utilities.

British Water is the lead association for companies operating in the UK water industry supply chain. The survey was conducted by British Water to obtain the views of its members regarding the Labour Party’s proposal to renationalise water companies in England and Wales, most of which were privatised in 1989.