Monday 24 September 2018 / 12:24 PM Economy / John McDonnell

John McDonnell announces water industry will be first example of “the biggest extension of economic democratic rights this country has ever seen”

Shadow Chancellor John McDonnell MP has today unveiled Labour’s plans for a new, publicly-owned water system, run by local councils, workers and customers and for “unprecedented openness and transparency” in how the industry will be managed. Building on Labour’s manifesto commitment to bring key utilities back into public ownership, for the first time McDonnell has outlined in detail how they would do it.

It comes as part of a package of measures to broaden ownership and control in the economy, including giving workers a third of seats on boards, billions of pounds for public services to be raised from Labour’s Inclusive Ownership Fund and a wide-ranging consultation on putting workers and service users in charge of running the water, energy, rail and mail industries which Labour will bring into public ownership. McDonnell also announced plans to launch a campaign against corporate tax avoidance and for Nobel laureate Professor Joseph Stiglitz to speak at the first meeting of a new ‘Bretton Woods’ international forum to reform global economic institutions.

Coming off the back of plans to set up a dedicated public ownership unit in the Treasury set out earlier this week, McDonnell said Labour were “planned, ready and prepared” to hand economic power back to workers, citizens and communities to a degree never seen before, saying Labour is ready “not just to fight another election campaign but to implement our programme when we win” and that “at the heart of our programme is the greatest extension of economic democratic rights that this country has ever seen.”

John McDonnell MP, Labour’s Shadow Chancellor, said:

“Water bills have risen 40% in real terms since privatisation. Water companies receive more in tax credits than they pay in tax. Each day enough water to meet the needs of 20 million people is lost due to leakages.

“With figures like that, we can’t afford not to take them back. But let’s be clear, nationalisation will not be a return to the past.

“We don’t want to take power away from faceless directors only to centralise it all in a Whitehall office, to swap one remote manager for another.

“Today Rebecca Long Bailey and I are launching a large scale consultation on democracy in our public services. We are also setting out our plans for a new publicly-owned water system that puts this essential service back in the hands of local councils, workers and customers.

“There will be unprecedented openness and transparency in how the industry will be managed. We are ending the profiteering in dividends, vast executive salaries, and excessive interest payments. Surpluses will be reinvested in water infrastructure and staff, or used to reduce bills. Real investment will allow the highest environmental standards.”

On the Public and Community Ownership Unit

“It will bring in the external expertise we will need. Let me make it absolutely clear that the full weight of the Treasury will be used to take on any vested interests that try to thwart the will of the people.

“Some said our manifesto was a fantasy or a wish list, attractive but ultimately not deliverable. I’m telling you today that we are planned, ready and prepared. Not just to fight another election campaign but to implement our programme when we win.”

On the campaign against corporate tax avoidance

“We can’t trust the Tories on this but we shouldn’t just wait until we get into government. We should act now.

”One way is to mobilise shareholder power to demand companies uphold basic tax justice standards. Numerous institutions from churches to trade unions and pension funds have large scale shareholdings in many of the companies that avoid taxes. So today I’m announcing my intention to bring together these organisations to launch a shareholder campaign.

“We’ll be demanding companies sign up to the Fair Tax Mark standards, demonstrating transparently that they pay their fair share of taxes. So fair warning to the tax avoiders, we are coming for you.”

On global dialogue and the international economic forum

“Gordon Brown recently expressed his concern at the current weaknesses in global relationships to deal with any future economic crises. With major nations on the brink of a trade war, and with climate change accelerating, we can’t risk the kind of international breakdown that led to the Great Depression.

“Just as at the Bretton Woods conference in 1944, there is an urgent need to work out if the current international system can cope with these threats. It isn’t working for the Western world, where stagnant wages have helped feed the rise of the racist right.

“And it isn’t working for the developing world, whose wealth is plundered by multinational corporations or stashed in Western banks.

“We will be convening in the spring an international social forum to bring together leading economists, politicians and civil society representatives, launching a dialogue on the common risks we face and the actions we need to take.

“I am pleased to announce that Nobel Prize winning economist, Joseph Stiglitz, has agreed to lead this discussion for us.”