Up next in 10
Prime Minister Andy Burnham is facing backlash from Labour MPs after reportedly axing the plans to place Thames Water into emergency special administration.
Reports indicated that Burnham backed away from the idea to place the water provider into temporary public ownership via a Special Administration Regime, much to the disgruntlement of some of his MPs.
05:49 - Matthew Wright discusses topic with Paul Powlesland, a barrister who will be speaking at the River Summit next week.
11:35 - Matthew reads out a text from Souther Water alerting people not to swim due to a discharge of untreated sewage into the sea.
13:05 - Matthew talks to caller Sue. She would love for the water companies to be nationalised.
18:41 - Caller Simon discuss the 'signing on fees' that the bosses of some water companies are recieving despite there being a block on paying bonuses to water bosses
22:19 - Matthew chews out caller Evelyn for defending the government. He says we've had far too long of those in power not doing enough.
Listen to the full show on the all-new LBC App: https://app.af.lbc.co.uk/btnc/thenewlbcapp
#watercompanies #matthewwright #LBC #drought #ThamesWater #hosepipeban
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0:00
So water, water. After 14 years in opposition, is it fair for us to feel, well, I suppose, angry with Labour, to want better, to expect more from water
0:13
And then I come back to, well, what is it we actually want our water industry to look like
0:18
And that question, I think, has a myriad of potential answers. Is full renationalisation the solution
0:26
I've said many times, I'm not 100% convinced, but as I said earlier in the programme
0:32
I've yet to hear of a model that is worse than the miserable setup we've had since 1989 that saw the creation of a bunch of monopolies
0:38
to all intents and purposes. And even the most ardent supporters of privatisation will accept
0:44
there have been huge problems with water and most will point the finger at the failure of the Environment Agency
0:49
to hold the firms to account. By the early noughties, you've got hedge funds and foreign investors
0:56
that are ploughing into our water industry. I mean, at that point, the alarm bells really should have been ringing, shouldn't they
1:02
Why? Investors were buying into our water industry, extracting profit, borrowing huge sums to cover the cost of the equally huge dividends
1:10
that were going back out to investors. And the last thing, the last thing on anyone's mind
1:15
appeared to be delivering clean water and removing sewage. What did I read the other day
1:20
that Thameswater, the worst offender, now owes nearly £20 billion, as well as over £120 million in fines issued by OffWatt
1:29
for sewage spills and rule breaches. And arguably worse than that, if only because it feels like Thameswater
1:35
is adding insult to injury, they recently paid a new financial executive
1:41
a £1 million signing-on fee. Money was paid to Steve Buck. It was actually paid to him 15 months
1:49
after he joined the firm. Definitely not a bonus, OK? Failing water companies aren't allowed to pay bonuses
1:54
if they miss performance, I guess. So this is not a bonus. It was a million pounds signing on fee
1:59
that he got paid 15 months after he signed on. Not a bonus, right
2:05
Water company bosses' total pay over the past year continued to rise despite the government's bonus ban
2:11
and public outrage over pollution. And Mark Thurston from Anglian Water, he got £1.9 million
2:16
including a £500,000 retention payment which for the benefit of LBC's lawyers
2:22
is definitely not a bonus, right? Don't be calling in and saying these people are getting bonuses, right
2:28
It was a £500,000 retention payment, not a bonus. The biggest package went to Louise Beardmore
2:34
Chief Executive of United Utilities. She trousered £2.5 million, £1.1 million more than the previous year
2:40
which is not a bad result really for getting to grips with leaks and such like
2:45
We all know water companies have had a terrible record with regard to sewage releases into our rivers
2:50
into our lakes and into the sea. I've seen, I mean, so many appalling sewage-related incidents
2:57
when I've been fishing. I'm literally no longer shocked. I'm still sickened, but I'm not shocked or surprised
3:02
And I suspect anyone who watched the Channel 4 docudrama Dirty Business about the scandal will share that revulsion
3:10
Which brings me back to Labour. and its failure thus far to do anything really substantial
3:18
with regard to reform of our water industry. And I'm really indebted to the politico.eu website
3:25
and this is an article well worth having a look at. They interviewed a bunch of players from across the water industry
3:33
So you're looking at watchdogs, water workers, water industry bosses and such like
3:39
And they spoke to Politico on condition of anonymity. And what they said, I have to say, sort of aligned with the various accounts that I have heard over the years
3:52
Andy Burnham has made it clear he opposes full renationalisation. He prefers a multi-stakeholder model that would mean the water industry was owned and monitored in different ways simultaneously
4:07
So you could have financial investors running the company alongside water industry workers, as well as customers and some form of government, central or local government representation
4:21
What comes strongly through the Politico report is the lack of a clear vision at the heart of government
4:29
There's lots of research, lots of looking at different models, lots of foot shuffling
4:33
but no obvious plan for the water industry after more than two years in government
4:39
and 14 years in opposition. 16 years. I've personally lost count of the number of Labour shadow ministers
4:46
when they were in opposition who promised wholesale reform of our water industry and yet very little progress has been made
4:52
And while I would dispute the government's claim based on research funded by four water companies
4:59
that renationalisation would cost £100 billion, I mean, how can a company with debts as big as its assets have any value at all
5:05
But there are serious questions about who will have to pick up the tab
5:12
for the eye-watering sums that will be needed to upgrade our water system
5:17
after decades of decline. And, you know, is it better to go to private industry for that
5:25
or do we end up paying even more? So, you know, I've thought about these issues a lot and I'm unsure about full renationalisation
5:35
I do think that I like the idea of stakeholders getting involved, but I think the elephant in the room, and I'll be interested to hear your thoughts
5:44
I think the elephant in the room is the costs that are coming down the line for the repairs that are needed
5:50
Let me bring in Paul Paulusland, a barrister. He's going to be speaking at the River Summit next week or the end of this coming week
5:56
I'll be at a couple of sessions myself and I think it's fair to say that Paul
6:00
aside from being a barrister is something of a champion of our waterways nice to see you this morning Paul Good morning So how life on your river
6:11
Well, it's lovely. We had a lovely summer, but also it's been a terrible summer in many ways
6:17
We still have one of the biggest sewage pollution incidents in London that's ongoing
6:22
750 million litres of sewage a year entering the river illegally through one outlet
6:28
And then the same outlet came this week when we had the break in the drought with the thunderstorms and delivered a massive surge of dark black brown road runoff pollution, which also was a massive pollution incident as well
6:41
So it's a beautiful river with many challenges which are not currently being solved or helped by the government or the Environment Agency or Thames Water
6:49
Now, it would be fair to say you're obviously a very intelligent man to be a barrister. Do you share my frustration at this government's apparent inability thus far to, I mean, reading the Politico article, to even come up with a plan
7:07
Yeah, I really do. I was hopeful that Labour might be different. And the most frustrating thing about it really is what low hanging fruit it is. So again, the roading gives a really good example of this
7:19
I realised that on the river roding, nobody knows, nobody or nobody knew where all the sewage was actually coming in and which outlets were the most harmful
7:28
So we're talking about the cost of repairs. But there's no way for the government currently to prioritise which outfalls to fix because they literally have no idea where it's all coming in and which is more harmful
7:40
And so I basically went out and decided to try and find the answer. So I got a bucket and my phone to time and an ammonia tester
7:47
and I walked the river and tested and found dozens of outfalls
7:51
that the Environment Agency apparently had no idea about, including that 750 million litres a year one
7:56
and also tested different outfalls to find out which ones were causing the most harm
8:01
and now have given that information to Thames Water so they can prioritise the fixing of the most harmful outfalls
8:06
You'd think this would be the most basic thing the government could do
8:10
a sort of sewage doomsday survey, if you will, to actually find out what the position out there is before we fix it
8:16
Because it may seem very obvious, how can we fix a problem that we have no idea of the extent of
8:21
And I'm also aware that many other rivers I visit have exactly the same situation of mysterious outlets that no one can seem to identify or attribute to anybody
8:32
I would say all of them. Every river. Every river. Yeah. Yeah, I'd be willing to bet there is on every significant river in the country
8:41
there is outlets which the Environment Agency or the government or the water companies have no idea about
8:47
which are illegally discharging sewage, which no one knows about. I mean, the 750 million litres a year one was particularly egregious because it's literally 200 metres from the centre of Ilford
8:57
It's a giant plume of poo coming into the river. You can see it
9:01
You know, it's very obvious. And yet it's been going for 30 years. And yet somehow the Environment Agency managed to miss it
9:09
And the key reason that they're doing that is the Environment Agency's policy is they only reactively respond to incidents, not proactively
9:17
So they only respond to incidents that people ring in. They don't go out and look for it
9:22
So because this plume was in a golf course where no one goes past, really, no one rang it in. So they never bothered
9:28
This is the most shocking thing ever. We need the Environment Agency or someone to actually go out there and look
9:34
Be proactive. So that brings us down, I suppose, to the most important question
9:40
which is what do we want our water industry to look like
9:44
And I think it's pretty obvious. I mean, I've been reflecting on this for a very long time
9:48
and I'm still not 100% sure. I've got a clear idea. I don't have the ability to talk to all the various stakeholders
9:55
that government does. But what's your vision of a decent water industry
10:00
I mean, I agree with you. I'm not sure nationalisation is going to be a panacea
10:05
but I also think that the current profit-driven model is clearly wrong. On the roading, basically the money that should have been spent
10:12
fixing these illegal sewage outlets has all been given to the company over 30 years
10:16
and they've literally stolen it and given it to shareholders rather than doing the work to fix the illegal outfalls
10:21
And that is disgraceful. It can't carry on. and but i don't think nationalization will necessarily solve everything in itself i think
10:30
it's a it's a first step it's necessary but not sufficient um and um the other key thing you
10:37
mentioned earlier about stakeholders i think what we really we need the rivers to be stakeholders
10:42
what what i've noticed on the roading is that you know by acting as a guardian i'm speaking
10:47
for the river in all of these decisions and actually the river needs to have a voice in this
10:53
Because, you know, with this budget to fix things, there is a limited budget to fix things
10:58
We know that. We probably can't fix them all, and we definitely can't fix them all straight away. So what I've been doing is speaking for the river and saying, well, actually, Thameswater, you've got a limited budget
11:08
This one here is much more damaging than this one over here. So actually, you can put that one over there down your list
11:13
It's not that bad. Concentrate on this one. That's what the river needs. You're making, I would say, a powerful argument for a model
11:20
a stakeholder model that does involve... I mean, I would love to see a representative of the river
11:27
sitting on a board, if only to stop things like abstraction during drought
11:32
which seems to be a vicious circle. The terrible, terrible state of our water industry
11:40
And then one of our listeners, Carol, down on the south coast, sends me this message
11:44
Her comment is, this is in real time. They haven't even treated it
11:48
The message comes from Arran District Council and says, this morning, we were notified by Southern Water
11:54
of a discharge of untreated sewage into the sea off the coast of Littlehampton
11:58
as well as in the mouth of the River Arran. We are adopting a precautionary approach
12:03
and are putting up signs at the beach advising against bathing in the sea and suggest that people and dogs do not go into the sea to swim or paddle Please monitor beach signs for updates And just want to mention that Larry Godston is the chief executive of Southern Water
12:19
£1.4 million his pay package was worth last year. I mean... Danielle messages, the water company racket is obscene
12:28
and I'm eternally perplexed by the lack of proper outcry. The oversight by in bed with the baddies government body off what is flabbergasting
12:36
and whilst in principle I wish through rose-tinted glasses that water was brought back into public ownership
12:42
I fear that ministerial greed and mismanagement would spell a different type of doom for this precious commodity
12:50
And she concludes, it's an odd situation where neither the people in charge nor the public en masse appear too bothered
12:56
despite the impending lack of water for human consumption and the horrendous damage being done to our environment
13:02
Sue's on the line in Thurrock in Kent. Morning to you, Sue. Good morning, Matthew
13:07
Nice to speak to you. Are you angry? Oh, God, yeah. Really angry
13:13
Who are you angry with? Who are you angry with? I'm angry with everybody, actually
13:19
Welcome to my world. Do you know what? This is what's happening to me on Saturday and Sunday mornings
13:26
I don't know whether I should apologise or feel really rather chuffed
13:31
Let's be more specific. Point some fingers for me, Sue. Okay. As I say, you know, I think the government's to blame
13:39
the water companies are to blame. With other utilities, like my gas and electric
13:45
I can choose who I go to, which actually keeps a bit of a lid on things
13:51
I can't do that with water. But I was thinking, you know
13:55
the stakeholder idea is quite a good idea. Maybe limit the level of
14:02
Not the level of investment, but by single entities that can invest in them
14:08
Yes. But I actually worked in the banking industry until about 14 years ago, 14, 15 years ago
14:17
And I was in a bank that was bailed out by the government
14:21
RBS? That's the one. and that bailout put metaphorical handcuffs on the executives
14:33
You know, they couldn't have the big bonuses. You know, they couldn't have sign-on bonuses
14:38
Oh, you can't call it a bonus? It wasn't a bonus, it was a signing-on fee for a million pounds
14:44
I mean, a bonus would be illegal. Oh, yeah, of course, yeah. A signing-on fee 15 months after you sign on
14:50
but also I mean RBS and NatWest have actually sort of split
14:56
to a certain degree now and dividends have only just started being paid again in the last few years
15:03
now I personally because I was a member of staff I used to do the save as you earn
15:08
I lost a lot of money from that I lost a lot of money
15:11
but you know it was what it was the value of your investment can go down as well as up
15:16
unless you're in the water industry where it just goes up Well, but, I mean, you know, it's particularly annoying
15:22
I mean, up the road from me, we've had a burst of watermaine for two weeks. See, I get angry about that
15:29
I mean, I've had other people tell me that sewage discharging is Shoreham today. I mean, if you go on the surface against sewage, they have a map
15:35
which shows you all the ongoing discharges, all the recent discharges, and the map has so many coloured dots on it
15:42
it's actually hard to see from the United Kingdom underneath. Sue, I've got to love and leave you
15:46
I can't think of one nationalised industry that has succeeded run by the government
15:54
because they cannot, they don't have the ability to run their own house
16:00
What I feel is starting enforcing the fines, starting to put an array of things which are expected
16:11
Andrew, Thames Water currently owe over £120 million in fines. I mean, they owe that
16:19
And, I mean, one of the concerns with fines is the customers end up picking up the tab, don't they
16:25
Well, that, again, you put it as a clause that that does not happen
16:30
You put it as a clause of restricting the money the CEOs are entitled to
16:37
You put in the clothes that they pay a percentage of their income as a failure
16:44
I would start locking them up, frankly, but that's, mind you, our prisons are full
16:48
Is there, the stakeholder idea, a number of countries have versions of it
16:56
I'm not fully au fait with how it would work in the UK, but the idea that you would have representation from the water company
17:04
from the environment agency, from local people, from customers, from groups that have special interests in rivers and lakes
17:13
and they all sit on a board together. Is that a better way
17:18
I mean, your suggestion seems to be trying to make the current model
17:22
which is failing, trying to make it work. Maybe it's better just to give up on it and try a different approach
17:28
The problem there is, once again, who would actually have the chief to do anything about what they're trying to do
17:35
Back to the government agencies. Look at the promises, for example, housing
17:42
We were supposed to have a million housing. 1.5 million by the end of the parliament, yes
17:48
Right, that never happens. Look at the president's situation. That is a disaster
17:56
So, again, where is this extra money going to be coming from
18:00
Andrew, I still wonder where the money we already have has gone. I mean, sixth, seventh richest economy on the planet
18:07
and yet all of our public services are broken and even privatised companies don seem to be able to deliver the service we pay them for Exactly And you are asking the government who can handle these services and can handle the money to take over a failing industry
18:24
And that would just disappear in the quango somewhere, saying, yes, we need more money, otherwise we can't do it
18:31
But I said earlier, I think I'd rather have a not very effective nationalised model than carry on with the rip-off nightmare we have at present
18:41
I just thought, I don't want to make you more annoyed, but on top of the obscene salaries that these directors get, they've also got millions going into their personal pension packages, their final salary settlements
18:58
And also they've got sums going into their expenses and company cars
19:03
I mean, the millions have been drained out to these individuals. It's so, so awful
19:11
The signing-on fee, I want to get my legal words right here
19:16
because I don't want to end up in a court case. So it was a signing-on fee of £1 million
19:22
for a new financial executive called Steve Buck, but he got the signing-on fee 15 months after he joined the firm
19:31
But it's not a bonus, Simon. Of course it isn't, no, no
19:35
Just yet another con, just another... the way these people look after each other, isn't it
19:42
All these pay boards that they look after each other. Yes. Remuneration
19:49
So you said you didn't want to make me more angry, and I'll have to say you have made me a little more angry
19:56
Sorry. Are you angry? Is the country angry? And are you angry with government
20:03
for failing to do anything substantial? Well, that's right. I mean, that was my biggest hope when Labour got in
20:11
that they would address the water situation, you know, immediately, get it sorted out
20:17
I mean, I can't understand why they can't just say, you know, these companies are already broke, aren't they
20:23
Many of them are, yeah. And they only work for one pound, and just buy them back for that, one pound
20:29
The figure that ministers have cited is that renationalisation would cost north of £100 billion
20:35
and as I understand it, the £100 billion figure was contained in a report from a couple of years back
20:43
that was funded by four of the water companies. There you go
20:48
There you go. And ministers are quoting it. And that lady was asking me why I was so angry with the Labour government
20:55
and that's why I'm angry with the Labour government. They know the figure isn't true. Yeah, absolutely
21:00
And on top of this, the banks are getting away with it. They've all effectively given all the money away to these individuals
21:08
They've allowed these huge loans to be given to these companies. Yes
21:13
They're full knowledge. The money will be going into dividends and the like
21:18
Yeah. And the banks aren't taken to task. They're getting away with all of this
21:21
As my dear friend Fogel Sharkey would say, it's a mafia swindle
21:26
And a number of people have mentioned, used the words organised crimes
21:30
One listener, I think it was Guy, said... No, it wasn't Guy. Hang on, I've got it down here
21:37
Jenny was saying that if there was no government involvement, it would be viewed as criminal
21:45
That's so right, yeah. And there's one other thing before you cut me off
21:50
It's just on thinking about back to the 70s, before privatisation, they were talking about building a national grid of water
21:59
Yes. And that would have, you know, because now they're very reliant on there being waterful to fill reservoirs
22:05
I have, I have, I have the conversation of joining up cs, lakes and such like, it's still ongoing, Simon
22:15
That conversation hasn't gone. Simon, pleasure talking to you. You know, what I find very frustrating about you, I've listened to you, and I've never rude to anybody, okay
22:27
But what I find frustrating is that what the... You know, I'm not saying this current government are perfect
22:32
Please remember, I voted Tory in the last election, OK? Now, what I find frustrating is that everything they talk about
22:41
is all on this government. You know, the last... They've only been in just over two years
22:46
Evelyn, Evelyn, Evelyn, they had 14 years in opposition to prepare a plan for water
22:53
And they've been in power for two years, and at the end of more than two years
22:58
and according to the Politico report where they've interviewed people on a condition of anonymity
23:05
the government doesn't have a clear plan today. 16 years, Evelyn, 16 years to come up with a plan
23:11
for the basic human right of water. Well, right, I agree with you there, Matthew
23:16
but you've also got to face the fact that the last government of 14 years, what did they do
23:20
The sewage problem... You've got to remember the Tories, the Tories were the ones that privatised it, Evelyn
23:25
They were the party that gave us sewage in our rivers and massive dividends
23:30
No, no, no. It doesn't mean it's because it's privatised that they gave us sewage. Sorry, I'm sorry. It's the wrong thing to..
23:35
You know, the public are not stupid. You know, they know what..
23:39
This government is trying to cope with all the wrong... You know, I'm not saying the current government are perfect, nor the Tories
23:46
But they criticise... You know, I never heard one criticism when the Tories were in government
23:51
Evelyn, Evelyn, Evelyn, I've got to stop you there because you might have listened to me from 7 till 10 in the morning
23:56
but you certainly haven't listened to me for over the years because I was a relentless critic of the Tories
24:00
and their dismal approach to the water industry. The water industry has been a massive problem for this country
24:08
and a massive subject of interest for me for years. For years
24:13
It is a disgrace, regardless of Tory or Labour. Both have treated our water industry
24:20
have failed to get to grips with our water industry
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