U.K. Labour's Motive for Nationalizing Water Is False: Telegraph
(Bloomberg) -- The opposition Labour Party’s motives for nationalizing the U.K. water industry are false because customer bills have not moved higher in real terms for more than a decade, Thames Water Chief Executive Officer Steve Robertson told The Sunday Telegraph.
“The frame of the debate is baseless. Service across every parameter has improved,” Robertson said. His utility is doing a “massive amount” to fix leaking pipes -- its network leaks 480 million liters a day but still could get worse by the end of the year.
Water companies would be the first to be nationalized under Labour’s wide-reaching plans to take control of utilities, rail and postal services. Labour’s policies threaten investment in infrastructure upgrades and customer interests, Robertson said.
The plans would undermine the “stable, long-term framework,” which has allowed water companies to invest 150 billion pounds ($195 billion) since privatization, by raising the risk of “tinkering from each new government of the day,” he added.
Labour’s Treasury spokesman, John McDonnell, told his party’s annual conference Sept. 24 a state takeover was justified by a 40 percent increase in water bills in real terms since 1989, when the companies were privatized. Higher bills coupled with increasing leakage and “we can’t afford to not take them back,” McDonnell said.
U.K. water utilities Pennon Group Plc, Severn Trent Plc and United Utilities Group Plc fell about 1.5 percent after McDoonnel’s speech.
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