Michael Gove tells water firms they are getting it 'wrong'
The Cabinet minister said high pay of water executives was of particular public concern
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Your support makes all the difference.Michael Gove has told water companies they are getting things “wrong” as he warned they would face a tougher regulator if things do not change.
The Environment Secretary particularly singled out concern over the high pay of company executives, leaks and prices as matters the public want addressing.
His intervention comes as Jeremy Corbyn’s Labour party has said it will outright nationalise water and other utility companies if it wins power.
Speaking to BBC Radio 4, Mr Gove said: “The public concern is there not because it’s a chimera or a phantom.
“The public concern is there because some water companies have not performed as well as they should have done.
“There’ve been a range of things that they have got wrong, a range of things that need to improve.”
The privatised water companies have come under attack in recent years after studies revealed they had increased their levels of debt and paid out big dividends to shareholders.
A study by the University of Greenwich found the companies had earned about £18bn in pre-tax profits over the past decade, and paid out about the same amount in shareholders.
Meanwhile, Water prices have outstripped inflation by 36% since privatisation, Ofwat figures show.
Mr Gove said: “Private sector investment has helped ensure that we have not just a quality of water supply and investment in that water supply, which is far better that was the case under nationalisation, private sector investment can also bring innovation and creativity.
“But when you are dealing with the provision of a service which is a natural monopoly then you need to regulation if the market is to work.
“What I do want to do is to make ensure that the regulator has all the powers that he or she needs in order to ensure that questions of legitimate public concern, both over remuneration and over other factors are properly addressed.”
At its annual conference in 2017, Labour vowed to renationalise railways, water, energy and Royal Mail.
Shadow Chancellor John McDonnell said: “Building an economy for the many also means bringing ownership and control of the utilities and key services into the hands of people who use and work in them. Rail, water, energy, Royal Mail – we’re taking them back.”
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