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Dramatic fall in support for water nationalisation after revelations on pension cuts

  • More than 4 million public sector workers to have pensions slashed under water nationalisation plans
  • Fewer than 1 in 3 people now support water nationalisation

Support for water nationalisation has slumped following last week’s exposure of Labour’s plan to hit the savings of nearly six million pensioners if they take the English water industry into government ownership.

Only 29% of people would support water nationalisation if it cut pensions in the way planned by Labour, according to a new poll by ComRes for Water UK.

This compares to the 83% support for water nationalisation, often quoted by supporters of public ownership, from a poll carried out in summer 2017 long before details about Labour’s water takeover plans emerged.

The collapse in support for nationalisation comes as more details of the pension raid emerges. Research by the Global Infrastructure Investor Association (GIIA) shows that there are more than 4 million public sector workers with pension funds invested in the English water industry. They face losing potentially thousands of pounds if Labour goes ahead with plans to force through a cut-price takeover of the industry.

It was revealed last week that Labour briefing papers showed that a future government would plan to pay a fraction of the market value for the English water industry if it took it over, and that the Party accepted there would be an impact on pensions invested in the industry.

In total there are 67 UK pension funds identified by the GIIA with investment in the English water industry, with 4,011,717 members of public sector schemes and 1,768,942 in private sector schemes. Pension funds affected include the 158,099 members of the UK Mineworkers Pension Scheme, the 370,142 people in the Greater Manchester scheme for local authority workers, and the 134,339 members of the Merseyside local authority pension fund. Around 350,000 workers at Tesco and more than 300,000 BT workers would also be affected by the impact of nationalisation. A table at the end of this story gives the full details.

Responding to the new figures on a fall in support for water nationalisation in England, as well as the new information about the impact on pensions, Water UK Chief Executive Michael Roberts said:

“More and more people are realising that spending tens of billions of pounds of taxpayers’ money to take over an industry that’s already reducing bills, increasing investment and cutting leakage doesn’t make much sense. When you add in the devastating impact on millions of pensioners it turns a bad idea into a deeply damaging one.”

ComRes was asked by Water UK to test public attitudes on what has been called Labour’s ‘smash-and-grab raid’ on the water industry. As well as finding the low levels of support for a government taking over the water industry, they discovered that only 22% of the public supported the attack on pensions which would happen as a result of Labour’s plans.

Since privatisation in 1989 around £160 billion has been invested in the water industry, with plans for another £50 billion over the next 5 years. Bills are roughly the same in real terms as they were 20 years ago and there are plans to reduce them by 5% in real terms over the next 5 years, meaning that by 2025 there will have been a decade of falling bills in real terms. Average water bills are now around £1 a day.

Leakage is down by a third since privatisation and is due to be cut by 16% by 2025 and by 50% by 2050. Water companies have spent around £25 billion on the environment since 1995, with 10,000 miles of rivers being protected and improved since then. Environmental work since privatisation has resulted in wildlife returning to rivers that had been biologically dead since the Industrial Revolution.

Customers are now 5 times less likely to suffer from supply interruptions, 8 times less likely to suffer from sewer flooding, and 100 times less likely to have low water pressure than they were when the industry was in Government hands.

Nationalisation would cost the British taxpayer £90 billion upfront, according to respected independent think tank the Social Market Foundation (SMF). This is money that could otherwise be spent on hospitals, schools and pensions. The cost is equivalent to the entire education budget, or enough to pay the salaries of every doctor, nurse and other NHS employee twice over.

The National Infrastructure Commission has said that significant ongoing investment is needed in the UK’s water infrastructure, estimated by the SMF to be over £100bn in the next decade. Were the taxpayer to fund these costs, investment would have to compete with other public services for Government capital spending. The SMF found that ongoing investment in water would account for over 13% of the UK’s entire capital spend. In comparison, building and maintaining schools and other educational facilities absorbs 18% of the capital budget.

PUBLIC SECTOR PENSIONS INVESTED IN THE ENGLISH WATER INDUSTRY
Name of Scheme Members
Avon Pension Fund 107,000
Cambridgeshire Pension Fund 77,323
Cornwall Council Pension Fund 52,450
Cumbria County Council Pension Fund 57,266
Derbyshire County Council Pension Fund 98,566
Devon County Council Pension Fund 122,524
Dorset County Council Pension Fund 69,136
East Riding Pension Fund (ERPF) 109,685
East Sussex County Council Pension Fund 71,232
Essex County Council Pension Fund 154,596
Falkirk Council Pension Fund 30,258
Flintshire County Council Pension Plan (Clwyd Pension Fund) 44,961
Greater Manchester Pension Fund (GMPF) 370,142
Hampshire County Council Pension Fund 154,191
Lancashire County Council Pension Fund 167,309
Leicestershire County Council Pension Fund 88,621
Lincolnshire County Council Pension Fund 74,052
London Borough of Barking and Dagenham Pension Fund 18,099
London Borough of Barnet Pension Fund 26,503
London Borough of Bexley Pension Fund 15,095
London Borough of Enfield Pension Fund 18,874
London Borough of Havering Pension Fund 18,193
London Pensions Fund Authority (LPFA) 84,466
Lothian Pension Fund & Lothian Buses Pension Fund 78,856
Medical Research Council Pension Scheme (MRCPS) 10,302
Merseyside Pension Fund 134,339
Northern Ireland Local Government Officers Superannuation Committee (NILGOSC) 114,026
Nottinghamshire County Council Pension Fund 136,917
Royal County of Berkshire Pension Fund 75,075
Strathclyde Pension Fund 233,312
Suffolk County Council Pension Fund 60,649
Superannuation Arrangements of the University of London (SAUL) 50,192
TFL Pension Fund 85,883
The City of London Corporation 12,857
Tyne and Wear Pension Fund 129,222
University of Oxford Staff Pension Scheme 13,378
West Midlands Pension Fund 313,399
West Yorkshire Pension Fund (WYPF) 101,857
Worcestershire County Council Pension Fund 57,821
University Superannuation Scheme 373,090
Total 4,011,717
PRIVATE SECTOR PENSIONS INVESTED IN THE ENGLISH WATER INDUSTRY
Name of Scheme Members
AA Pension Scheme 26,169
Affinity Water Pension Plan 2,422
Akzo Nobel (CPS) Pension Scheme 27,758
BAE Systems Pension Funds 121,000
BBC Pension Scheme 64,327
BMW (UK) Operations Pension Scheme 75,301
British Airways Pension Scheme 37,000
British Coal Staff Superannuation Scheme (BCSSS) 52,964
BT Pension Scheme (BTPS) 308,183
Church of England Investment Fund for Pensions 40,000
Cooper-Avon Tyres Pension Trust 1,541
DMGT Senior Executives Pension Fund (SEPF) 285
Harmsworth Pension Scheme 19,068
James Neill Pension Plan 2,203
Liberata Pension Fund 17,433
Lloyds Group Pension Schemes 140,800
Marks and Spencer Pension Trust 115,378
Nationwide Pension Fund 30,197
Plumbing Pensions (UK) 35,711
Port of London Authority Pension Fund 3,215
Reed Elsevier Pension Scheme 32,433
Santander (UK) Common Investment Fund 60,000
Shell Overseas Contributory Pension Fund (SOCPF) 8,879
Tesco PLC Pension Scheme 350,000
Trafalgar House Pension Trust 25,000
UK Mineworker’s Pension Scheme (MPS) 158,099
Veolia UK Pension Plan 13,576
Total 1,768,942
Grand total (Private and Public Sector) 5,780,659

Research by Global Infrastructure Investor Association (GIIA)