Scottish Water - a victory for the Scottish people v the UK Government

Why is Scottish Water still - largely - in public ownership while water companies in the rest of the UK are privatised? The answer is solidarity. The degree of opposition to privatisation was so widespread and so strong right across Scottish society that the UK Conservative government didn’t dare to do it.  Recently, Financial Times commentator Camilla Cavendish, in a piece entitled “Water privatisation was never going to work, recalled:

“In 1989, the sell-off [in England] was touted as the route to greater efficiency and investment. But between 2002 and 2018, Scottish Water, which remains publicly owned, invested on average nearly 35 percent more per household than English water companies, according to researchers at Greenwich University.”

Water was privatised in England under Margaret Thatcher. In 1994, the Conservative government under John Major geared up to do the same in Scotland. It was a period when demands for Scotland to have more control over its affairs were building. The plans to privatise Scottish water met a massive wall of opposition. 

Strathclyde Regional Authority decided to hold an advisory referendum to test the strength of feeling. They held a postal ballot. There was a huge turnout with  71.5 percent of electors in Strathclyde returning their papers. An extraordinary 97.2 percent wanted Scottish water to remain in public hands. No to privatisation votes numbered 1,194,667 - yes votes just 33,956

This referendum had no legal force at the time. The UK government still had the legal power to do what it wished with Scottish Water. At that time, Scotland didn’t even have a Parliament or a National Assembly. It was run by the Westminster “Grand Committee” on Scottish affairs which was regularly stuffed with English MPs from the shires because there were too few Scottish Conservatives to vote through the Government’s plans. 

The Westminster record of the time, Hansard, records MP for East Lothian John Home Robertson saying in a debate about the referendum:

“Frankly, the result did not surprise me. What surprised me was the massive turnout of electors. I am amazed that even this Government think that they can shrug it off. I have no doubt that the result would have been exactly the same if the question had been put to my constituents and those of my hon. Friends in the Lothian region.”

Home Robertson said almost nobody supported privatisation:

“The Secretary of State for Scotland prefaced his remarks by saying that we had to return to the issues of state in Scotland today and consider this controversial issue. I have news for the Secretary of State for Scotland: this is not a remotely controversial issue. It is one of very few issues about which it would be impossible to start an argument in the streets, households, pubs, clubs or anywhere else in Scotland today. There is no support anywhere in Scotland for the proposal to take the water and sewerage industries out of the control of democratically accountable local authorities”

Eventually, the local water authorities were merged to form Scottish Water, which is a publicly-owned water company subject to scrutiny by the Scottish government. WeOwnIt, a campaign to take English water back into public hands, writes in its mission statement:

“If you live in Scotland, your water is already run for people not profit - and you're paying less than the rest of us. The publicly owned company Scottish Water is the most trusted public utility in the UK. It is constantly investing, keeping customers happy and reducing its carbon footprint."

It quotes 'Jane, WeOwnIt supporter': 

"In Scotland, the water supply is still publicly funded-and long may it last. Compared to England and Wales, there are no glaring inefficiencies, no shareholders to mollify, no drive to force up charges. We pay the water charges with our council tax and it works!"  

We are seeing consternation in England at the behaviour of the water companies currently, with huge amounts of water being lost through leaks, and raw sewage being pumped into bathing water at beaches along the south coast. Last year, Jenny Jones told the House of Lords that Britain was fast returning to its pre-EU status as “the dirty man of Europe”. She was speaking at a debate about legislation to enshrine legal protections for beach quality post Brexit. EU law sets legal stanadards for clean beaches - but the UK doesn't have that now. The Conservative government rejected the protections. 

There are issues in parts of Scotland too - the River Almond has had effluent pumped into it - but upgrading work is in progress and it should be clean enough to swim in by 2024. In contrast, the Daily Telegraph reported last week that every single beach along the stretch known as the English riviera was polluted with sewage.  Water campaigner Feargal Sharkey tweeted:

“A No.10 "Spokesperson said since the industry was privatised in 1989, the equivalent of £5bn had been invested to upgrade water infrastructure.' Let me remind you during the same period Water Companies have paid out over £72bn to shareholders.”

Even the right-wing Spectator magazine recently published a front-page article entitled “Water Woes”, in which leader writer Ross Clark conceded that privatisation has failed to deliver the promised benefits:

“It wasn’t supposed to turn out this way when the water industry was privatised by the Thatcher government in 1989. It was promised that privately owned water companies would unleash a wave of investment, and that they would introduce competition, reduce consumer prices and make the industry more responsive to demand. It is hard to see how any of these objectives have been fulfilled. Nor, indeed, has the water industry become as private as critics feared. Thames Water, which services 15 million people, is still largely owned by public sector entities, just not entirely British ones. Among its largest shareholders are the Ontario Municipal Employees Retirement System, the UK Universities Superannuation Scheme and sovereign wealth funds of China and Abu Dhabi. Almost 10 percent of Thames Water is owned by the Chinese government.”

By Jackie Kemp