We must trust the public to run their own utilities

‘We Own It’ published an interesting proposal earlier this week for the future democratic public ownership of the water industry. I share their critique of the current ownership of the industry, which is failing to invest at the speed necessary to tackle leakage. Customers currently have little power and there are few signs that the industry has grasped the scale of the climate crisis. Water bills have rocketed since privatisation, while there have been huge dividend payments to the often remote and unaccountable owners.

But I support a different method for securing genuine democratic public ownership. I want employees, John Lewi-style or consumers co-op style, to directly own the water business in their area. I don’t see why consumers should only be regularly consulted and stay once or twice removed from control of water firms.

The proposal of We Own It seems to give at least a passing nod to the scepticism of the right, which is based on the idea that people can’t be trusted to run the very services they depend on themselves. There are many examples around the world of utilities and other highly complex services being run by ordinary people directly. 

By way of example, We Own It has proposed a new board for Thames Water that would contain not one directly elected representative of consumers. It is all indirect representation – the power to determine bills, decide priorities and choose investment priorities will still be kept away from the people most affected, Thames Water consumers. Of course, there is a need for professional management in water services, but that need is also there in other co-operative and mutual businesses. They manage to achieve both: direct consumer and employee control, and a well-run businesses. 

In New Zealand, when the electric power boards were commercialised, all consumers served by the board at the time of the restructuring were deemed to have owned them. As a result, a large number of consumer or community trust-owned companies were established, such as Vector or Electricity Ashburton (EA Networks).  EA networks is co-operatively owned. Customers elect the board members on a one-member-one-vote basis. Vector are 72% owned by a consumer trust, which provided the company with board members.

If democratic public ownership is to survive a future Tory government, we need to promote a model that is not remote, keeps employees directly involved in key decisions and hands real power to customers and employees directly. We have a shared critique of the current ownership in the water industry, and these are interesting proposals from We Own It. But they don’t go far enough in putting those best placed to make the big decisions in charge. It’s time for co-operative and mutual-run water businesses.