John McDonnell vows to sack fatcat water bosses as part of renationalisation plan
3 min read
Highly-paid water company bosses would be sacked under Labour's plans to renationalise the industry, John McDonnell
The Shadow Chancellor said the radical reforms would represent "the biggest extension of economic democratic rights this country has ever seen".
Under the plan, ownership of the existing privatised water and sewerage companies would be transferred to new Regional Water Authorities made up of staff, local councillors and other community representatives.
Most employees would be transferred straight over to the new bodies under TUPE rules, except for "senior executives and directors" whose jobs would be re-advertised at salaries limited to 20 times those of the lowest-paid worker.
In his keynote speech to the Labour conference in Liverpool, Mr McDonnell said that water bills have risen 40% in real terms since privatisation, while the service provided to customers has declined.
"With figures like that, we can’t afford not to take them back," he said.
He added: "There will be 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."
The Shadow Chancellor also confirmed plans to force big firms to hand over 10% of their equity to their employees.
And Mr McDonnell announced plans to launch a shareholder campaign aimed at putting pressure on companies which dodge tax.
He said: "We’ll be demanding companies sign up to the Fair Tax Mark standards, demonstrating transparently that they pay their fair share of taxes. So fair warning to the tax avoiders, we are coming for you."
But company bosses dismissed the speech, which received a standing ovation from Labour delegates.
Stephen Martin, Director General of the Institute of Directors, said: "Renationalisation across the board would lead to lots of sound and fury, solving nothing.
"Firms rely on functioning public services and utilities just as much as households, and are just as fed up with instances of sub-par services. But putting industries in the hands of government officials would do nothing to improve efficiency.
"Recreating public monopolies funded by the taxpayer is not the answer to private monopolies. Competition and better regulation is."
CBI director general Carolyn Fairbairn said: "No-one in business would disagree with the fundamental aims of these policies – to engage and motivate employees, deliver for customers and share prosperity. And it is good to hear the Shadow Chancellor say he is proud of the millions of businesses who contribute to communities across the UK.
"But with Labour’s current proposals, the fallout for the UK, its workers and customers would be a drop in living standards."
But union bosses welcomed Mr McDonnell's plans.
Unison general secretary Dave Prentis said: "Labour has set out a radical, inspiring and achievable alternative to Conservative economic chaos.
"Working people need a Labour government and an end to Tory austerity rule.
"It was great to hear the Shadow Chancellor reiterate his commitment to bringing water back into public ownership. Now it’s time for Labour to commit to bringing all public services back in house within the first year of a Labour government."
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