Government presses on with privatisation of Water Service, guarantees on price levels worthless
Next April we will be facing the prospect of the creation of a new water company and the introduction of water charges. Many believe that concessions have been made that appear to soften the blow of water charges. Rather than the 25 per cent discount previously offered, the government promised to create a fund that would subsidise lower bills pensioners and other low-income households. There is also a guarantee that such households will not have to pay more than three per cent of their income on water. This could mean 200,000 homes paying an average annual bill of about £180. For the remaining households the average annual bill would be about £350, down from the £400 in the previous proposals.
However, a closer examination reveals these commitments to be a sham. Firstly, the water charges are still at a higher level than we currently pay through our rates. The average bill is more than twice the amount we pay now; even the reduced bill is higher. Secondly, and most importantly, the policy of moving of the Water Service out of the public sector and towards privatisation is still in place. Once the new water company moves out of government ownership, any commitments on the level of the water charge will be null and void. The new owners will not be bound by those guarantees. When this happens concessions will be withdrawn and prices, which are already being set at a high level, will rise rapidly.
The new government proposals also introduce water meters. Pensioners will be given the option of having a water meter installed from 2007, while all new houses will have water metre fitted as standard. This is the most divisive and unequal method of water charging. Evidence from England has shown that metering shifts the burden of payment to the poorest people in society, to those people with large families or suffering from disability. Water metering is also likely to have negative consequences for public health with people worrying about washing or flushing the toilet. It also completely distorts the costs of the water system. These are not in the amount of water used by each household but in maintaining the network.
It is privatisation that
is driving the introduction of water charges. Their purpose is to
build up profits in the new water company and make it attractive to private
investors. Government ministers have claimed that money raised by
the water charge can be used to fund other public services. But this
is not true. All the money will be held by the water company.
Neither will it be used it be used to make much needed improvements to
our water system. The move towards privatisation and the priority
that will be given to building up profits means investment will be keep
to the lowest possible level. Parts of the service, such as water
treatment plants and the customer services department, have already been
privatised. The role of the new board, whose directors are on a £1000
a day, is to steer the Water Service towards privatisation. Its chairman,
Christopher Mellor, is the former head of the private water company Anglican
Water. With hundreds of redundancies and the closure of local offices
the Water Service is actually being run down. We can already see
consequences that cost cutting is having with the recent flooding in the
Lower Ormeau area, and the refusal of the current chief executive of the
Water Service to commit it to carrying out the work required to prevent
further floods. With water charges and privatisation we face the
prospect of paying more for a worse service.