Water industry should forget about 'threat' of nationalisation and focus on fixing its leaky performance

Water UK has been seeking the support of MPs with talk of the 'risks to investment' posed by bringing the industry back into state hands

OfWat sharply criticised some warer companies over their performance during the Beast from the East cold snap this year (Rex Features)

Trade body Water UK is taking the prospect of nationalisation under a possible Labour Government seriously, and so it should given the febrile political climate.

Not for nothing have bookmakers slashed the odds of a General Election occurring this year from an unlikely 5-1 (16.7 per cent change) to 7-4 (36.4 per cent chance) in response to recent events in Westminster.

As such the industry champion sought to use a Parliamentary reception this afternoon to highlight what it described as “the risks involved in any move to nationalise the water industry” Apparently investment, service improvements, environmental standards and low bills (really?) are all under threat.

Chief executive Michael Roberts went on to declare that nationalisation “raises big questions”.

He said: “The prospect of a state-owned sector struggling, as it did 30 years ago, to be a priority for public spending with potential negative impact on services and the environment, carries risks which need to be considered carefully against the positive work achieved to date by regulated private companies and how they are addressing the challenges which lie ahead.”

Scary stuff indeed.

As well as looking at a nightmare past reminiscent of Stephen King at his scariest, MPs were treated to some big numbers: £150bn invested by companies in improvements since 1989, an annual £8bn of continuing investment.

Crikey!

Strangely enough some other chunky figures, such as the amount paid in salaries to water industry bosses who oversee local monopolies, and the dividends that have flowed out of the industry and into the coffers of overseas investors, weren’t included among them.

But let's set that to one side and look at the pièce de résistance: MPs were told that some 86 per cent of the public “trust their water company”.

That's actually not nearly as impressive as it looks. It means 14 per cent have doubts about those providing a rather important service.

The e-mail I received in the wake of the event also failed to include how that figure was arrived at. Information such as who collected the data, how many people were polled, and the wording of the question asked to arrive at a conclusion like that are all rather important factors to take into consideration.

But Mr Roberts said that it's jolly well “higher than some other sectors I could mention”.

Which, of course, is completely irrelevant to what has been going on in the water industry, such as the market failures that have made nationalisation a popular idea among certain parts of the public.

The recent report issued by OfWat, not exactly the toughest kid on Regulation Street, into the dismal performance of certain water companies in the wake of this year's “Beast from the East” cold snap spoke volumes.

When set against its damning conclusions, recalling a dimly remembered past and throwing big numbers that are favourable to you around like confetti isn’t going to cut it.

What MPs, what we all, need to hear from the water industry is how it plans to plug its many leaks because, frankly, it’s rapidly running out of river.