Bill Murray, Birmingham South Socialist Party
While it is becoming more and more clear that privatisation of England’s water industry has been a disaster from both a cost-of-living and an environmental perspective, the Financial Times published an article announcing that Yorkshire Water CEO Nicola Shaw‘s pay for this year was £1.03 million. This includes a £371,000 bonus despite being criticised by watchdog Ofwat after a burst pipe limited supplies to 12,700 households for a fortnight last year without even providing bottled water. Of course, Yorkshire residents have also suffered pollution as well just like the rest of the country.
We shouldn’t be too critical of Ms Shaw’s bonus though as it is only 42.2% of the maximum allowable! She will also get an undisclosed payment from Yorkshire Water’s Jersey-registered parent company, as well as from International Airlines Group where she is a non-executive director.
According to Kate Bayliss, a water expert at the University of London, there is no evidence that higher CEO salaries lead to better social and environmental outcomes. She further added that water executives seem to be unaware of the disdain the public hold them in.
While Nicola Shaw and her colleagues are raking it in, Ofwat has provisionally agreed a 25% increase in Yorkshire Water bills.
Yorkshire Water paid £84.1 million in dividends this year, up from £62.3 million the previous year, although they go to great pains to state that the ‘ultimate shareholders’ (including a Singaporean wealth fund) have not received a dividend for eight years. Of course, all readers of The Socialist will sympathise with their plight!
It isn’t just Yorkshire Water who have been paying their senior management obscene bonuses, completely unrelated to performance. Almost bankrupt Thames Water, Severn Trent and Southern Water have also paid out substantial bonuses.
Yorkshire Water said that its bonus scheme took into account “customer service and environmental measures as well as considering the wider performance of the business in the round”, and went on to say: “Over the past year we’ve been making great strides to improve our performance as a company, and the hard work is beginning to pay off.” So the bosses give themselves an early reward and their customers are rewarded with inflation-busting bills to fund investment that should have been made while they were having a bonus bonanza.
It is absolutely clear that the system of regulating utilities is as broken as the private ownership model of the industries themselves. They are either toothless, gutless, don’t have the necessary powers or are just too close to those they are supposed to regulate. Instead of the tougher regulation that Keir Starmer would probably attempt to introduce, we need public ownership of all utilities under the control of customers, workers and the wider trade union movement – with no compensation for the polluting fat cats, only on the basis of proven need.
