Labour Party Leader Jeremy Corbyn and Shadow Chancellor John McDonnell have launched another attack on the UK water sector this weekend, restating the Labour Party’s pledge to bring energy, rail, water and mail services back into public ownership.

In a speech at the Alternative Models of Ownership Conference on Saturday, the Labour Party leader launched a strong attack on private ownership of the UK’s critical infrastructure, saying:

“…It cannot be right, economically effective, or socially just that profits extracted from vital public services are used to line the pockets of shareholders when they could and should be reinvested in those services or used to reduce consumer bills.”

He described the Labour Party drive to renationalise the utilities as “a catapult into 21st century public ownership” and not a return to the 20th century model of nationalisation.

Commenting on the water sector, Mr Corbyn said:

“The regulators have proved too weak and too close to the companies they’re supposed to be regulating and too prone to corporate capture which is why we’ve seen productivity increases of just 1% a year since our water industry was privatised despite all the new technology that the water industry has at its disposal.”

Water bills have increased 40% in real terms since privatisation, he said but the public had nowhere else to go for water when prices go up.

“It’s this ridiculous and highly profitable situation that the water companies are so desperate to protect. The case for public ownership is so clear and so popular and we’ve demonstrated how it’s an investment with no net cost for the taxpayer. The water companies are so frightened that some have commissioned a so-called independent report to make the public believe nothing can change.” he continued.

Speaking separately in a speech in London, Shadow Chancellor John McDonnell vowed to fix “broken” water companies in a drive to put major industries back into public ownership.

According to research from Labour, since 2010 the water companies have paid out £13.5 billion in dividends to shareholders, almost the entire amount they made in pre-tax profits, and received more in tax credits than they paid in tax

Mr McDonnell commented: “These figures reveal that our water system is broken.”

"The next Labour government will call an end to the privatisation of our public sector, and call time on the water companies who have a stranglehold over working households.

“Labour will replace this dysfunctional system with a network of regional, publicly-owned companies.”

"Wrong for Labour to suggest our water system is broken"

Michael Roberts, the chief executive of Water UK, which represents all the UK water companies, issued a strong rebuttal, saying the Shadow Chancellor was completely mistaken.

“It’s wrong for Labour to suggest that our water system is broken. Water companies secure capital provided by lenders and shareholders, who need water companies to make a return in order to finance significant improvements to the industry. 

“Under public ownership, the water sector in England was starved of cash and standards were poor. Private companies have instead invested heavily to reduce leakage, improve drinking water quality, and protect the environment – and they continue to invest £8 billion each year in even better services. In real terms, bills are roughly where they were 20 years ago and will be falling over the next few years.”