There has been a lot of speculation about how the running of the UK’s water industry might change under Andy Burnham, but the simple reality for businesses unhappy with the price or service they are receiving is that there is always the option to switch business water supplier.
It could be easy to overlook this amid a lot of discussion about what Mr Burnham will do in government, with his rhetoric at least leaning towards a far more interventionist approach to the economy.
Nationalisation was once a dirty word, even for the Labour Party, but that is no longer the case. However, while Mr Burnham’s time as Greater Manchester mayor saw buses come under public ownership, he has not yet come out and said the same will happen with water.
Will Thames Water Be Nationalised?
This has created uncertainty, not least in the case of Thames Water, which has been struggling both to survive financially and to deal with a track record of pollution that has seen it hit multiple times by Ofwat with serious penalties.
A consortium has been in talks to take over the firm, but this is in doubt as the government has refused to rule out nationalisation.
Speaking to LBC Radio last month, housing minister Matthew Pennycook said the situation is “all options on the table”, hitting out at the poor quality of service given by the company and highlighting government concerns over the viability of the “recapitalisation” plan.
Mr Burnham, speaking during his campaign at the Makerfield by-election that paved his way to Downing Street, said Thames presented an “overwhelming case for public ownership”. However, there has been no announcement that this will definitely happen.
Since there is much uncertainty over the fate of Thames Water, any suggestion of a wider programme of nationalisation, even if Mr Burnham supports the idea in principle, must be considered remote, at least for now.
There are some good reasons for this:
- It would be very expensive to do, as most companies are not distressed assets like Thames
- It is likely to be low on the list of priorities at a time when the public finances are under pressure from growing demands in areas like defence spending
- The public finances also face pressure from higher borrowing costs
Indeed, it has been suggested that even in the case of Thames, the company could be put in a special administrative scheme by the government until it finds an acceptable buyer who can provide long-term security.
As well as the cost issues involved in nationalisation, there is also the risk of legal action against the government if Thames is forced into administration.
What Water Policies Is The Government Already Pursuing?
However, while there is some policy uncertainty, there are steps the government is taking.
Firstly, Mr Burnham has inherited some pledges from Keir Starmer, most notably the goal of constructing nine new reservoirs in central and southern England to increase water capacity.
Following the drought conditions witnessed this year, it is inconceivable that any government would water down such a pledge. Indeed, given the increased evidence of accelerating climate change this summer, the case for action is greater than ever.
In addition, Mr Burnham has inherited other changes made since the Labour government took office, including beefed-up powers for Ofwat and plans to replace it with a new regulatory body in the future.
Will Water Customers Get A Better Deal Under New Consumer Panels?
Nonetheless, the latest steps announced by the government aimed at improving the lot of customers left disappointed by their water companies have fallen well short of what some had hoped for:
- The Consumer Council for Water (CCW) is creating “powerful consumer panels” where customers can question water company executives and get redress for failings
- However, documents released under a freedom of information request have revealed that the CCW asked water companies how they wished to be held accountable
- Campaigners have argued this means the panels will be ineffective
Among those criticising the plans is musician and water campaigner Feargal Sharkey, who described it as a “stitch-up”.
He added: “The CCW is asking the extorters what should be happening to the victims, this is an outrage and a scandal.”
A CCW spokesperson has denied that it is making life easy for water companies, describing this as a “complete misrepresentation”, stating that the aim of the exercise was to “work through the practicalities of how we could ensure their full engagement in the panels.”
Examples of this included “giving them enough lead time to ensure their chief executives were able to attend the accountability sessions and making sure action plans were produced in good time.”
It remains to be seen if the CCW system is useful in holding water companies to account, or falls short as Mr Sharkey claims.
Why Should Business Customers Focus On the Chance To Switch Water Provider?
However, while domestic customers who are unhappy with their water providers may or may not conclude in future that the new panels are effective in bringing about improvements, as a business customer you have the option to change supplier that domestic customers lack.
This means that if you are unhappy with the standard of customer service, the response when there is a problem or simply the price, you don’t need to hope that a panel holds them to account. You don’t need to see if nationalisation will happen and make a difference.
Instead, you can simply switch, with our switching service enabling you to compare your options, find the best one and complete the process swiftly and easily.
The best news may be the fact that the government has not said it will do anything to curb this opportunity for commercial water users.
Moreover, as nationalisation does presently look a fairly distant prospect, at least for companies not called Thames, the idea that water might all be bundled up into a small number of state-run companies, or even just one, should be no concern.
Instead, you can expect to go on having a plethora of potential private water suppliers, each of which knows it needs to meet business customer expectations, or lose its customers rapidly.
If you think you are getting a raw deal on your water contract, now is the time to get a better one.
