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GMB Slams Ofwat Proposal For Water Competition

Tuesday, September 20, 2016

GMB Slams Ofwat Farcical Proposal For "Competition" In Water Natural Monopoly

Ofwat is making itself into a total laughing stock with this absurd proposal says GMB

GMB, the union for water workers, commented on the new proposals by Ofwat to open the retail water market in England to more competition with the potential of banks and supermarkets controlling our water supply (See notes to editors for copy of Ofwat press release).

Stuart Fegan, GMB National Officer said “Ofwat’s plans to introduce competition to the residential retail water market is removed from reality.

Water is a natural monopoly and no consultation process will change this. You would think Ofwat would learn from “the market” in the energy sector, they are making themselves a laughing stock with this absurd proposal.

The truth is that Ofwat are fiddling with competition and market reforms in a monopoly water industry as Britain continues to flood and consumers are ripped off. It doesn’t bear thinking about that our water supply could be put in the hands of supermarkets, banks, or any other Tom, Dick or Harry who wants to have a go at selling our natural resource with all the risks to public health that may entail.


Introducing further competition into the Water Industry doesn't have any recognisable public support. Customers want a water supply which is safe and regulated to the highest standards as well as affordable which requires significant and ongoing and secure capital investment in the assets of water treatment and supply.

The only way to stop this rip off is to create a level playing field for consumers. This means re-nationalisation of this natural monopoly and this must be a priority for the next Labour Party election manifesto.”

End

Contact: Justin Bowden on 07710 631351; Stuart Fegan on 07912 890434 or GMB press office on 07958 156846 or press.office@gmb.org.uk

Notes to editors

1 Ofwat press release 19 September 2016-09-19

http://www.ofwat.gov.uk/pn-1416-competition-residential-retail-water-market-prevent-customers-left-behind/

PN 14/16 Competition in residential retail water market could prevent customers being left behind

Introducing competition to the residential retail water market could be worth almost £3bn and prevent water customers being left behind in a retail revolution, a new report suggests.

The assessment comes as Ofwat publishes its report on the costs and benefits of introducing competition to the residential retail water market in England, as requested by the government.

In its assessment, Ofwat stressed the uncertainty in predicting the outcome of opening the market, but has identified a range of potential financial and service benefits.

The financial benefits from opening the market to competition could be worth £2.9bn over 30 years, which amounts to £8 per customer, per year.

Ofwat’s report suggests that reductions in customer bills are possible but likely to be small, especially in the short term. However, it could lead to innovation, improved customer service, new offers – including bundling of products such as energy and telecoms with water – and, crucially, give customers the freedom to choose their supplier – ending the final retail monopoly. Customer research suggests that 56% think having choice would be a good thing.

In the course of its review, Ofwat heard from a number of potential new entrants, who can see the opportunity from a new market to provide retail services more efficiently, to offer new products and services, and make customers’ lives easier.

Ofwat’s modelling of potential costs and benefits also identifies possible improvements in water efficiency and in reducing bad debt costs, as retailers get better information about customers and their water use.

Of course, in setting up a new market, there would be significant costs which would ultimately fall on companies and customers. Some of these can be minimised with a well-timed, well-planned process to open the market and by learning from other markets including the opening of the business customer retail market in England.

Cathryn Ross, Chief Executive of Ofwat, said:

“We are living in an age of retail revolution, but water customers are being left behind.

“The service offers from water companies can feel behind the curve compared to the innovation customers benefit from when buying other goods. The uncomfortable truth is that, when it comes to retail offers, water companies provide an analogue service in a digital age.

“Customers tell us they think they should have the freedom to choose and don’t understand why water is the only retail market in which there isn’t some form of competition.

“But, of course, this isn’t a one-way street. There are significant costs to be considered, and it will be important to ensure that customers are treated fairly in a competitive market and that vulnerable customers are protected. The decision for the government to make is whether the potential benefits outweigh the costs and risks.”

Ofwat has submitted its assessment to the government of the potential costs and benefits of opening the residential retail water market in England.

It is for the government to decide whether in principle it wants to introduce competition and, if so, how and when to do so.

Ends

GMB press release dated Monday, July 27, 2015

GMB To Ballot Members In Water Industry In North East And Eastern England In Dispute Over Pensions Cuts

Northumbrian Water returned approximately £630 million profit back to the Hong Kong based owners CKI in the last two years so there is no need for these cuts says GMB.

GMB, the union for water workers, is to undertake a consultative ballot of members employed by Northumbrian Water and its subsidiary companies in a dispute over pensions.

GMB will ballot members in the North East and members in Essex and Suffolk Water who are owned by Northumbrian Water.

Northumbrian Water supplies 2.7 million people in Tyneside, Wearside and Teesside as well as the counties of Durham and Northumberland and parts of North Yorkshire. Essex and Suffolk Water supplies 1.8 million people in southeast Norfolk, east Suffolk, Essex and the London boroughs of Barking and Dagenham, Havering and Redbridge.

Discussions have been taking place since the early part of 2015 but no progress has been made.

Maxine Bartholomew, GMB Regional Organiser, said “Northumbrian Water want to change the terms and benefits of its final salary scheme. Unions are now undertaking a consultative ballot which could result in a formal ballot for industrial action.

The company claim that the current final salary scheme is unaffordable.  However the trade unions have said that Northumbrian Water have at each stage consistently failed to show costing to back up their arguments.

The BBC recently reported that Northumbrian Water returned approximately £630 million profit back to the Hong Kong based owners Cheung Kong Infrastructure Holdings (CKI) in the last two years so there is no need for these cuts.

CKI gave assurances to the regulator OFWAT and the Trustees of the pension scheme that it was fully committed to fully safeguarding pension entitlements.

CKI are just wallowing in greed.  Shareholders and offshoring are being put before pensioners. A product that falls from the sky naturally should not be abused in this way.”

Pat McCourt, Organiser for Unite, added “What is happening is a scandal.  While massive profits are being sent back to China, thousands of loyal workers in Northumbria Water face poverty in their later years.”

Ends

 

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