Shadow Chancellor John McDonnell has reaffirmed the Labour Party’s commitment to renationalise the water companies in his keynote speech to the Labour Party Conference in Liverpool today.

Referring to what he described as “the scandal of the privatisation of water”, the Shadow Chancellor said water bills had risen 40% in real terms since privatisation, £18 billion had been paid out in dividends and the water companies receive more in tax credits than they pay in tax.

With enough water to meet the needs of 20 million people lost each day due to leakages, “with figures like that, we can’t afford not to take them back”, he told delegates, commenting:

“We are also setting out our plans for a new publicly-owned water system that puts this essential service back in the hands of local councils, workers and customers.

“There will be an unprecedented openness and transparency in how the industry will be managed. We are ending the profiteering in dividends, vast executive salaries and excessive interest payments.

“Surpluses will be reinvested in water infrastructure and staff, or used to reduce bills. Real investment will allow the highest environmental standards.”

Along with the water companies, the Labour Party is also planning to bring energy, Royal Mail and rail back into public ownership – but not “to take power away from faceless directors to a Whitehall office, to swap one remote manager for another.”

Together with Shadow Secretary of State for Business, Energy and Industrial Strategy Rebecca Long Bailey, John McDonnell said the Labour Party was now launching a large scale consultation on democracy in public services.

Water companies warn speech provides no answer to big questions about risks involved 

The water companies have responded swiftly to the Shadow Chancellor’s speech. A statement issued by Water UK, the trade association representing water companies, said:

“This doesn’t answer any of the big questions about the risks involved in a government taking over and running water companies. Since privatisation, the water industry has invested around £150 billion to improve services. Bills are roughly where they were twenty years ago in real terms – they are currently around £1 a day - and leakage has been cut by a third since the mid-90s.

“New proposals aim to cut bills and leakage even further, and investment is planned to increase to £10 billion a year. There’s no explanation of how a government-run water industry would match or beat the ambitious plans for the future that we have set out, and there’s still the serious risk that water would be a long way down the list of priorities for government funding, far below health and education.”