Water companies are under the spotlight like never before, thanks to beach protests, social media and high-profile campaigners. Now Labour says water bosses who intentionally pollute could be jailed
Campaigners, from surfers to rock stars, are circling our profit-driven polluting water industry. And increasingly these companies have nowhere to hide. Labour’s latest pledge – to put the squeeze on those profits and make the companies pay for every single pollution incident – may not have the same ring as “nationalise the lot”. But it reflects a toughening of public mood.
For years, companies like Southern Water have been able to get away with pumping money into shareholders’ pockets, while pumping sewage into our rivers.
Feargal Sharkey, the former Undertones frontman turned campaigner, has been scathing in his criticism. He was first motivated to get involved because of his love of fly fishing as a boy, when he used to catch salmon in the River Faughan near his home in Derry.
From Derry to the chalk streams of Sussex
He said in an interview with Rolling Stone magazine, it was as chair of a fishery club on the Lea in Hertfordshire that he realised something was wrong with the flow of the river. Now a Sussex resident, his investigations led him to recognise the threat to the county’s chalk streams, which he says are “some of the rarest habitats on Earth.”
Sharkey has taken his campaign from Twitter onto the political stage. On the platform at this year’s Labour Party conference, he said: “During the last two years alone, English water companies have spent almost six million hours on over 750,000 occasions, dumping sewage into our rivers and our seas… What we are witnessing collectively between industry and government is an unprecedented attack on the environment.”
Away from the political arena, protests have been held all along the coast: Hastings has had two – the first one over a year ago. Further along the Sussex coast, South Coast Sirens, outraged at the complacency of Southern Water, raised funds for their own mobile lab to test water quality. Also in the frontline are Surfers Against Sewage, with over 160,000 followers on Facebook.
The most recent demonstration, in Kent, saw protesters turn a beach in Whitstable into a “crime scene”.
At the same time, the drive for profits has continued. Sharkey summed it up for Labour delegates. Since privatisation the water industry as a whole has paid out over £72 billion in dividends. Water company bosses have notched up salaries and bonuses totalling over £58m in the last seven years alone. He continued: “Just last year, the boss of Severn Trent Water was paid the remarkable sum of £3.9m… And all of it, every last penny, every stick of it, funded from our pocket by water bill payers’ money.”
With the national spotlight firmly on them, the companies are trying to make up for lost time. Southern claims to be investing £2 billion (or around £1,000 per household) in the five years to 2025, “to significantly improve our performance,” says recently installed CEO Lawrence Gosden, while self-consciously claiming his “remuneration … is amongst the lowest in the sector.”
Money down the (debt) drain
It’s always been about the money though. Certainly Southern’s biggest investors, the Australian hedge fund, Macquarie Asset Management (MAM), is in it for that reason. But the Financial Times has reported on the scale of the problem they now face.
Macquarie in effect rescued Southern from a debt crisis, meaning that only £230m of the £1 billion equity it invested in the company was used to improve the company’s operations. And most damningly, the FT reports: “Already at least one-fifth of the typical £400 per year household bill goes to paying interest rather than infrastructure improvements and services.”
Earlier this year Labour vowed to fix the “broken system” which, its research reveals, has seen water companies successively cut back on infrastructure, while paying huge dividends to shareholders. Households in England and Wales have paid out £138 a year, every year, over the past decade to cover the cost of dividends to investors such as Macquarie (previously investors in Thames Water).
It gives some context to the £14 per year current rebate from Southern. It won’t be much more than that when the company pays its share of the £150m being returned to customers from April 2023 as a result of missed targets by the country’s water companies, flooding of homes and interruptions to water supply. Southern Water and Thames Water are the worst offenders.
Labour sets discharges target
Labour has rowed back from the calls for nationalisation. Instead, the shadow environment secretary, Jim McMahon, told delegates in Liverpool that Labour would bring in powers to strike off company directors and could jail water bosses for the worst pollution incidents.
McMahon said Labour would bring in measures to “clean-up” the water system. These include giving the Environment Agency the power and resources to properly enforce the rules and introduce a legally binding target to end 90% of sewage discharges by 2030. There would be mandatory monitoring of all sewage outlets with automatic fines for discharges, and a standing charge penalty where monitoring is not in place.
Hastings & Rye’s Conservative MP Sally Ann Hart appears genuine about the need to tackle the pollution issue – she braved jeers at the latest Clean Seas protest at St Leonards. However, her government’s prescription stops short of tackling the root cause of the problem. And the party’s links to private capital were plain in the welcome afforded to water company executives at this year’s Conservative Party conference. They included Southern Water’s director of environment and corporate affairs Toby Willison, interestingly the former executive director of operations at the Environment Agency.
Labour’s approach at least looks promising. On a broader front, McMahon said the party’s ambition was to “breathe life back into our countryside and coastal communities … The next Labour government will bring the protections and opportunities afforded to our national parks, to our coastal areas.” He pointed to Labour’s record in creating the first National Park in the Peak District in 1951 and in 1997 the legalisation of the right to roam.
Meanwhile, coastal communities worry that the failure of past governments to effectively tackle the pollution problem has created an almost unstoppable crisis.
Paul Barnett, Labour Leader of Hastings Borough Council, naturally blames the Conservatives for sidelining the problem during their 12 years in power. He told Sussex Bylines: “The images that we are seeing of sewage dumping are a consequence of that failure to act. Towns like ours rely on tourists attracted to our beautiful beaches – and the shocking conduct of water companies is putting that at risk.”