Corbyn energy network POWER GRAB ‘will cost YOU more on your water bill’ – Severn Trent
Last week the Labour Party unveiled a plot to purchase the country’s £62billion energy networks for billions of pounds below the market price, should leader Jeremy Corbyn win the next General Election. Labour wants to bring utility companies, including National Grid, Scottish Power and SSE, back under public ownership. But Severn Trent, one of the biggest water companies in Britain, has warned how this could damage growth and ramp up the cost for customers. The water giant has warned against using market value as a “starting point” for possible talks after Labour revealed plans to justify a lower bidding price in documents released last week.
In its portfolio of energy networks, Labour said it would disregard any infrastructure that is in need of repair or redundant.
Investors, banks and pension funds would be compensated by Government bonds, according to the party document.
Severn Trent said: “Any associated changes in government policy may fundamentally impact our ability to deliver the group’s strategic objectives, impacting shareholder value.”
Labour has pointed to water bills rising by around 40 percent over the last three decades as part of their drive for nationalisation.
But Liv Garfield, chief executive of Severn Trent, said analysis from Ofwat, the industry regulator, suggests customers would be paying £120 a year more if privatisation had not taken place.
Pre-tax profits at Severn Trent rose by almost 7 percent to £563 million for the year to March 31.
Rebecca Long Bailey, Labour shadow Business Secretary, said: “The fact that Severn Trent is putting shareholder interest before the public interest on the day it announces a profit increase underlines why the water industry must be brought into public ownership.
“Instead of running this vital resource and national asset in the interests of private profit, Labour will ensure it is run for the benefit of us all.”
UK business group the Confederation of British Industry (CBI) this week warned the impact from nationalisation would spread beyond the businesses directly affected.
President John Allan said: “Labour’s proposals are not just a threat to these industries but to investment in our country at a time when it’s most needed, and above all to that essential partnership between business and government.”
John McDonnell, Labour shadow chancellor, has maintained that investors would receive “the appropriate sum”.
He said: “Across the world, public ownership of basic utilities such as water and energy are a normal part of the ‘essential partnership’ between business and government, providing affordable and reliable services.
“It is time the CBI caught up.”
The CBI also criticised politicians for failing to have agreed on a plan for Brexit over the past year.
Mr Allan added: “It’s not for business leaders to tell politicians when to trigger democratic events.
“But be in no doubt political failure today means economic failure tomorrow.”