Pennon Group, owner of South West Water, awards £300K pay rise to CEO Susan Davy

Water Company Workers PipelayingWith a background of repeated pollution events by the water industry as a whole, the recent cryptosporidium outbreak in Devon, and the recent announcements of large dividends to shareholders, the news of a large pay increase to the CEO of an underperforming water company rankles.

The whole structure of public utilities in the UK, particularly those that are essentially monopolies, is a scandal. The concept of privatisation, to improve efficiency, and to allow private investment for modernisation of the country's infrastructure has been shown to have failed repeatedly, especially with the water industry which has been allowed to ramp up prices to permit excessive dividend payments whilst failing abysmally to invest in the necessary infrastructure.

But is re-nationalisation the right answer?

Probably not. It is our policy that public utility suppliers should be properly regulated. Standards and targets should be set, and those companies should be required to meet those targets before any profit taking permitted.

That does not necessarily mean taking utilities back into public ownership, thereby requiring investment to come from the public purse with all the ramifications of direct day-to-day political interference from under-qualified politicians.

An alternative way to achieve the same end might be the creation of a new class of public company - a 'Public Community Interest Company', similar in structure and the aims of the existing private Community Interest Company class. This would be able to raise finance and investment on the markets, but would be profit capped, and only be able to pay limited dividends after meeting it's preset re-investment targets. This type of structure might be low yield for investors, but would also be very low risk, and therefore a good investment for institutional investors as part of a balanced and safe investment portfolio.

The resulting public utility company would benefit from being able to raise finance, and retain many of the benefits of a PLC, notably operational independence and decision making, whilst being obligated to meet its regulatory targets, with consumers reaping the benefits of lower bills through capped profits.

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We are actively seeking potential candidates, especially those who may already be considering standing as independents, who are committed to promoting genuinely sustainable economic growth for Britain, but who don’t necessarily accept some of the growth restricting policies of other environmental parties.

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