Severn Trent boss Liv Garfield offered suggestions in an email, inviting executives to “soft test” ideas to be presented to the Labor Party. Tayfun Salci/Zuma Press
Boss Severn Trent called an emergency meeting with the public utilities bosses to avert the threat of nationalization under a potential Labor government.
Liv Garfield, who paid £4m a year to take over the company from the FTSE 100 list, and sent out an email to her colleagues asking them to join a roundtable to discuss the future of the utility industry and the potential for transformation in companies with “social goals”.
Marked “delicate” and “strictly confidential,” Ms Garfield's email said the roundtable would provide a “soft-test” opportunity for ideas to be presented to the Labor Party.
Business leaders are gearing up for a potential Labor victory in the next general election, expected to take place as early as May 2024.
Ms Garfield said a working group of industry leaders should be looking to push Labor away from more intervention, despite calls for a nationalization of the water sector.
She suggested one alternative could be repurposing company structures so that they could still make a profit, but with the requirement to have “special duties”. independent economic regulation, which investors attach great importance to,” she said.
In her email, first reported by the Evening Standard, Ms Garfield added: “While it is clear that Labor will not include nationalization in its next manifesto, it also does not seek to enter the race for the status quo. Management believes there is room for improvement and there is significant political pressure to “do something” with utilities.
“One of the ideas that we think might be attractive to the Labor leadership is the repurposing of utilities and the grid into a new breed of company with a stated social focus – companies that remain privately owned, that absolutely can (and should) receive profits, but who also have a special responsibility for the long term.
“The UK is entering a period of massive investment in infrastructure (some estimates say £650bn over the next 10 years) and the last thing we want to do is to increase (farm-style) the value of the investment.” /p>
This is due to the fact that the UK water industry is mired in turmoil. Thames Water, the country's largest supplier, is struggling to convince investors to put £1bn of new capital into the business.
3006 Thames debt
The Telegraph reported on Thursday that Southern Water will receive about £500m sterling from its shareholders to strengthen its finances. Yorkshire Water announced a deal with its owners for a similar amount on Monday.
Seven Trent and United Utilities have the distinction of being listed companies with lower levels of debt.
Rating agency Moody's added its concerns about Thames Water's finances in a note to investors late Thursday.
Moody's analysts have warned that Thames will not face the inevitable adminis- capital injection, doubt will depend on the long-term future of the company.
Ministers warn against turning the Thames into public ownership, as Labor leaders are also skeptical of nationalization.
Sir Keir Starmer has already abandoned former leader Jeremy Corbyn's plans to return water and power companies to public ownership.
However, Labor supporters have begun to urge Sir Keir to think about rethinking.
Clive Lewis, Labor MP for South Norwich, told The Guardian: “When you look at the challenges we will face as a result of climate change – years of drought and then years of rain – you will realize that the desire for profit stimulates investment. . , running these services, is simply inconsistent with how anyone might feel about this situation. That's where we're going – that's where science says we're going.
“This goes beyond an ideological struggle about the public good and the private evil. The public understands that something needs to change. Labor must come to the fore and show that at heart they care about the best interests of the British people.”
Keith Osamore, Member of the Edmonton Labor Party parliament, added: “That's enough. Thames water should be returned to public ownership without compensation to shareholders. The British public has been deceived for too long. The model of risk nationalization and profit privatization has failed.”
Severn Trent refused comments.
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