How District Heating Can Transform Urban Energy Landscapes

By Felicity Bradstock - Nov 19, 2024

District heating is a proven, efficient, and cost-effective way to reduce carbon emissions from buildings and industries.

Several cities worldwide are implementing innovative district heating projects using diverse heat sources such as waste heat, geothermal energy, and even body heat.

The widespread adoption of district heating networks can play a significant role in achieving global decarbonization goals and transitioning to a sustainable energy future.



As governments worldwide invest heavily in a green transition, both the public and private sectors are exploring alternative options for heating that do not rely on fossil fuels. According to the International Energy Agency (IEA), the operations of buildings account for 30 percent of global final energy consumption and 26 percent of global energy-related emissions. Therefore, reducing the dependence on fossil fuels for heating and power in residential and commercial buildings will significantly support decarbonisation efforts. One method being used to provide clean heat to buildings is district heating, which is being increasingly used in big cities and densely populated areas.

District heating, also known as heat networks, involves generating heat in a centralised location and then distributing it to residences, businesses, and industry in a local area. District heating networks are efficient, low-cost and often low-carbon, meaning they offer a promising alternative to fossil-fuel-powered heating options. However, most areas that could benefit from the development of district heating networks have yet to tap into the heat source.

In 2022, district heating production accounted for around 9 percent of the world’s heating need in buildings and industry, and many of the projects continued to rely on fossil fuels. To support decarbonisation efforts, governments must, therefore, encourage the uptake of bioenergy, solar thermal, large-scale heat pumps, and geothermal technologies.

Several countries have already developed district heating networks and others are looking to do the same. In Hamburg, the government developed a network powered by the Borsigstrassee waste incineration plant (MVB) in the east of the city. Waste heat from the MVB is fed straight into the district heating network. The project has the potential to supply 35,000 households in Hamburg with heat and reduce emissions by 104,000 tonnes of CO2 annually.

In Belgium, the city of Antwerp hopes to become the first to connect its buildings to a sustainable heating network by the end of the decade. The City of Antwerp is working with the global design and consultancy organisation Arcadis to produce a roadmap for the implementation of a district heating network programme that draws residual heat from industrial businesses to buildings in the city via an underground network. They hope to connect 35,000 homes to the network by 2030.


Sweden is taking an even more low-carbon approach to district heating by using body heat to reduce its conventional energy use. The government has created a network to transfer heat from Stockholm Central Station – which around 250,000 people pass through every day – to the nearby 17-story Kungsbrohuset building, to reduce energy consumption. Similarly, the Mall of America, in Minnesota, United States, does not use a central heating system and instead maintains its 21oC year-round temperature using passive solar power through 1.2 miles of skylights, with heat generated from lighting and body heat.

Now, the U.K. has big plans to develop a district heating network in London. The government announced plans to heat around 1,000 buildings, including the Houses of Parliament and the National Gallery, using low-carbon heat sourced from the River Thames, London Underground, and sewer networks. This is part of a plan to develop seven heat network zones with almost $6.4 million of public funding. The project will use a network of pipes to carry excess heat from underground to power hot water and central heating systems in London.

The $1.27 billion initiative will be carried out by heating specialists Hemiko and Vital Energi and is expected to reduce carbon emissions by as much as 75,000 tonnes a year. At present, district heat networks contribute just 3 percent of the U.K.’s heating needs. However, they could supply as much as one-fifth of the country’s heating, according to estimates by the Committee on Climate Change.

Miatta Fahnbulleh, the Minister for Energy Consumers, stated, “Taking waste heat from the River Thames and London Underground to heat such iconic places as the Houses of Parliament and the National Portrait Gallery is a really exciting example of what lies ahead on our journey to low-cost, low-carbon heating. Fahnbulleh added, “This project will help support hundreds of jobs and make bold new strides towards boosting our energy security.”

A report published in February by the global engineering company Danfoss estimated that in the EU alone, excess heat was equal to 2,860 TWh annually, which could almost meet the EU’s total energy demand for heat and hot water. This suggests that the development of widescale district heat networks could massively reduce heat waste and help decarbonise residential and commercial heating. Supermarkets, transport networks, data centres, and commercial buildings are constantly releasing waste heat, yet few companies are doing anything to capture and use this heat. There is huge potential for the development of district heat networks in cities around the world, which would reduce the need for gas and electric heating and help the buildings sector decarbonise by sustainably reusing waste heat.


By Felicity Bradstock for Oilprice.com

The privatised water industry shows how the British economy is rife with predatory practices

Prem Sikka 

Yesterday

LEFT FOOT FORWARD
Columnist
Opinion


'With the full approval of the state, too many industries are dominated by organisations of dubious practices, if not downright criminal activities.'

The UK’s regulatory structures provide a window for assessing power, politics, and public accountability. With the full approval of the state, too many industries are dominated by organisations of dubious practices, if not downright criminal activities. The privatised water industry in England provides such a window.

Since privatisation in 1989, water company shareholders have extracted at least £85bn in dividends and unknown billions in returns through intragroup transactions. Customer bills have been hiked and investment in infrastructure has been neglected. Last year over a trillion litres of water was lost to leaks. Raw sewage was dumped into rivers, lakes and seas for 3.6m hours. Meaningless, star ratings are awarded by regulators to promote and protect industry. Last year, United Utilities and Severn Trent Water secured four-star rating from the Environment Agency even though the companies were responsible for 1,374 illegal sewage spills. United Utilities didn’t report that between 2021 and 2023 it dumped 140m litres of waste, mostly illegally, into Lake Windemere, a major tourist attraction. Such practices boost corporate profits, dividends and executive pay, and neglect people’s welfare. The UN special rapporteur on the human right to clean water said that behind a wall of secrecy England’s water companies put the interests of shareholders ahead of the public’s right to clean water.

Puny fines by regulators are just another cost of doing business, and failed to check predatory practices. The state guaranteed monopoly of water and wastewater disposal in England and Wales is controlled by ten companies with criminal convictions. Since 1989, water companies have had 1,109 criminal convictions for dumping sewage. The roll-call of abusive practices is led by United Utilities with 205 separate convictions. Thames Water has 187 convictions; South West Water 174; Anglia Water, 128; Yorkshire Water, 125; and Southern Water has 119 convictions. Their abusive practices have created health hazards and harmed biodiversity and marine life. Yet their licence to operate has not been cancelled. Ofwat, the water regulator for England and Wales, is considering lower or no financial penalties on companies for unplugged leaks and sewage dumping in case it increases financial pressures on them. Ofwat can’t protect customers because it is simultaneously responsible for promoting growth of the industry.

On 4th November 2024, during the parliamentary passage of the Water (Special Measures) Bill, I proposed that any water company with more than two criminal convictions in a five-year period should be placed under “special administration” giving them a chance to mend their ways or lose licence to operate. The government and the Conservative party opposed the amendment. Criminals will continue to control the vital water industry.

Imagine what might have happened to a manufacturer of aircrafts, auto, food and medicines for identical number of criminal convictions. Their licence to operate may have been cancelled and customers would sue them. But such things do not happen to the water industry. Ofwat has authorised water companies to hike prices by 44% for the period 2025-2030. Companies are pushing for rises of up to 84%. Companies say that they may be able to invest in infrastructure and remove dangerous lead pipes by the year 3273 (yes, you read that right), despite a previous commitment to replace them by 2050.

In crony capitalism, regulators are too close to companies and there is regulatory merry-round. Conflicts of interest abound and cognitive capture is normalised. At least 27 former Ofwat directors, managers and consultants have taken-up senior positions in water companies. Individuals from regulatory bodies are in demand by water companies because they can open doors and help to secure favours, and enable water companies to game the regulatory system. Due to never-ending austerity and cuts in public spending, many regulatory staff are poorly paid. Whilst in regulatory positions they begin to look for greener pastures or are targeted by water companies. Every interaction with a water company becomes a potential job interview. There is always a temptation to go easy and be extra helpful to a potential employer as that can help to land a better paid job. No one wants to sour the potential for a better paid job by being tough or awkward with a potential employer. Despite questions in parliament, Ministers are content with the current state of affairs.

Ofwat director Seema Kennedy, former Conservative Minister, is campaigning to make it harder for consumers to sue water companies that breach legal sewage limits. She is also a paid senior adviser to the lobbying firm which works for the industry body that represents big water companies. The current Environment Secretary has accepted donations from a water company convicted of illegally dumping sewage. Ministers have been having secret meetings with water companies and declared that “some stricter options that had been proposed were now off the table”. These include bringing the water industry into public ownership. Strangely, in response to my question in parliament, the government defended privatisation of water by citing a 2018 report funded and commissioned by the water companies, and published by right-wing Social Market Foundation. A former government adviser said that the report had “virtually no intellectual substance” and was “wrong”. He added that renationalisation would be “relatively easy, as with the revenues from the water bills, the government would have sufficient income to pay for the assets it acquired”.

Predatory practices can be checked by having customer and employee representations on their boards with power to vote on executive pay. Such amendments have been tabled during the parliamentary passage of the Water (Special Measures) Bill by myself and Baroness Jones of Moulsecoomb. Stakeholder representation would empower people whose daily life is affected by water companies. More than 90% of water companies are owned by overseas investors. We also want the normal laws of capitalism to apply to water companies i.e. no bailout of shareholders and debtholders. They have all been opposed by the Labour government and Conservative opposition. They are content for the industry to be controlled by organisations with criminal convictions.

The Water (Special Measures) Bill enables the government to restructure failing water companies and push them back into the private sector, with customers and the public purse bearing the cost of restructuring. The government has launched what it claims is an Independent Commission to examine the water sector and its regulation. The Commission’s terms of reference require it to “focus on reforms that improve the privatised regulated model”. So it cannot consider alternatives to private ownership. Issues such profiteering, exploitation and democratisation of the water industry are beyond its remit.

Water isn’t the only industry controlled by organisations of dubious practices. The finance industry has a long history of mis-selling numerous financial products, including car loans, pensions, endowment mortgages, precipice bonds, split capital investment trusts, interest-rate swaps, mini-bonds and payment protection insurance and more. The aim is always to rip-off customers. The eventual compensation, when caught, is paid by levying higher charges on other customers. Banks have a long history of money laundering, sanctions busting and tax dodges. UK governments and regulators cover-up their predatory practices. The City of London Police fraud investigation unit is funded by Lloyds Bank. There is little urgency about investigating frauds by banks.

Consider the case of frauds by HBOS officials which go back to 2002. The victims were the taxpayers, small business customers of the bank, and HBOS shareholders. HBOS was acquired by Lloyds Banking Group in 2008. Despite the overwhelming evidence, Lloyds Banking Group, the Serious Fraud Office, regulators and the Treasury refused to investigate. In 2017, Anthony Stansfeld, Thames Valley Police and Crime Commissioner, prosecuted and secured six criminal convictions. There has been no investigation by the Financial Conduct Authority (FCA) or compensation for the victims of fraud. The government and the regulators deemed it to be a matter for Lloyds Bank. Eventually in 2017, it appointed former high court judge Dame Linda Dobbs to investigate and publish a report by 2018. To date, no report has been published into the £1bn scandal, and it may never see the light of the day.

This article has only referred to the water and finance industry but predatory practices are prevalent all across the UK economy. Too many sectors are dominated by companies with dubious reputations. It is hard to name any major company that is pristine. Predatory practices flourish because governments are disconnected from the people and thereby erode confidence in institutions of governance.

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.

PRIVATIZED WATER

Thames Water secures $3.9B loan to keep it afloat through October 2025


Thames Water, Britain's largest water utility, announced Friday it had secured a $3.9 billion lifeline, access to cash reserves and extensions on its liabilities to keep it afloat for the next 12 months as it battles to restructure a $20.8 billion mountain of debt. File photo by Terry Schmitt/UPI | License Photo

Oct. 25 (UPI) -- Britain's embattled Thames Water, the country's largest water utility, announced Friday it had secured a $3.9 billion line of credit, access to cash reserves and extensions on its debt to keep it afloat through October 2025 after regulators capped bill rises.

The company, which serves 16 million homes and businesses in London and the southeast, said in a news release that it had launched a "consent process" on a transaction support agreement with its creditors and shareholders that if approved would provide a significant boost to Thames Water's "liquidity runway."

It said completion of the Liquidity Extension Transaction and the related Security Trust and Intercreditor Deed proposals would improve the solvency position of the business sufficiently "to enable us to continue with the planned investment and maintenance of our infrastructure in order to continue to meet customers' needs, and our environmental responsibilities."

The deal buys Thames more time to restructure a $20.8 billion debt mountain that it admitted would climb to $23.3 billion by the end of the financial year in March.

Related

British water companies ordered to repay $139M to customers for poor performance
Britain's Thames Water secures $960M cash injection amid nationalization threat
Britain weighs taking Thames Water utility into public ownership
British water utilities seek approval for $117B modernization plan paid for by higher bills
British water companies ordered to repay $139M to customers for poor performance

But Thames said it would also allow it to progress its equity raise process, a recapitalization transaction and complete a final determination process to figure out if a five-year Ofwat package of price controls, service requirements and incentives is workable -- and if not, to appeal to the antitrust regulator.

Launching an appeal with the Competition and Markets Authority would further extend the transaction, keeping Thames liquid for another seven months through May 2026.

The BBC reported that the deal centered on existing creditors agreeing to take a haircut.

Last month, Thames warned it could run out of money by December after Ofwat, the water industry regulator, placed it in special measures and denied it permission in July to hike customers' bills -- initially by 43% by 2030 and then 53% -- that the company said it needed to avoid going bust

Thames and 15 other water utilities in England and Wales wanted to cover the $135.7 billion cost of modernization plans to maintain quality drinking water, build 10 new reservoirs and cut water pollution by raising annual bills by $187 over the next five years.

But Ofwat capped the rise at $122 amid public anger over poor performance including the loss of billions of gallons of water through leaks, raw sewage spills into rivers and lakes and polluted swimming beaches.

Thames was allowed a 23% raise meaning the average bill will rise to $695 a year.

The cap is linked to a September 2023 ruling in which Ofwat said 11 of the water companies must pay their customers back a combined $139 million in 2024 through lower bills as a penalty for "underperformance" on pollution, leaks and customer service.

As the largest water utility by far, Thames had to pick up 90% of the tab or $122.7 million after their performance was assessed against annual targets for 2022 to 2023 and found "seriously wanting." It was among seven water companies judged as "lagging, with the other four deemed only "average" and none were categorized as 'leading.'"

However, CEO Chris Weston hailed Friday's announcement as proof of the progress Thames, which has a $20.8 billion debt mountain, was making toward getting back onto a more stable financial footing, stressing that the company had also upped Ofwat-verified service performance levels

"We are working closely with and have the support of our creditors, enabling Thames to continue to implement our turnaround plan so that we can deliver better results for our customers and the environment whilst seeking to attract new capital into the business," said CEO Chris Weston.

"In the meantime, our teams on the ground continue to supply our services to our 16 million customers every day."

Thames Water Chairman Sir Adrian Montague said the finance injection was an important step in the process of bolstering the company's long-term financial resilience.

"There will be further stages and we will continue to work collaboratively with our many stakeholders as we look to attract new equity into the business and seek a final determination that enables the delivery of our ambitious business plan for the next five years," said Sir Adrian.

UK 

Water companies push for higher bills again as customers face up to 84% hike

Thames Water has asked to raise its bills by 53 per cent by the 2029-2030 financial year (EPA)

Howard Mustoe
Tue, October 22, 2024

THE INDPENDENT

Water companies are lobbying for bill rises of up to 84 per cent in the next five years in a fresh blow to customers.

Firms including beleaguered Thames Water have applied to the regulator, Ofwat, to hike tariffs so they can upgrade their networks, often after years of underinvestment.

The increases will also pay for higher energy costs since pumping water around the country uses plenty of power, as does treating sewage. Energy costs make up around a tenth of water companies’ costs.


Southern Water wants bills to rise the most from today’s prices, by 84 per cent, with Thames Water asking for a 53 per cent rise. Northumbrian water has requested the least, at 21 per cent for the 2029-2030 financial year.

Since being privatised in 1989 by the then Conservative government, many water companies have been accused of underinvestment and paying large dividends to their new owners.

Thames Water has come in for particular scrutiny because of its parlous financial position. It has been teetering on the edge of collapse and is trying to raise money from its investors.

Southern Water is asking for the largest bill hike, a rise of 84 per cent 

(Chris Ison/PA) (PA Archive)

The company has £15bn of debt and it is in talks with 90 of its creditors who hold about two-thirds of those borrowings.

The companies have also been criticised for the amount of raw sewage that has been dumped into rivers and the sea.

The firms can release sewage when rainfall is high to prevent flooding, but these releases have grown in frequency and have led to more beaches being shut.

The Environment Agency has warned against swimming at 24 sites in the UK because of drops in water quality, warning of the risk of sickness for those who do.

Earlier this month Ofwat said water companies were being hit with £157.6m in penalties after they missed pollution and leak targets. Thames Water accounted for more than a third of the fines at £56.8m.

The firms’ poor performance has led to calls for the companies to be renationalised, but that would cost £99bn, an unlikely figure given Chancellor Rachel Reeves’ plan to shore up public finances.

Baroness Hayman, a Department for Environment, Food and Rural Affairs (Defra) minister, told the House of Lords last month: “Given the significant costs attached, the Government has no intention to nationalise water companies.”

Labour vowed to “put failing water companies under special measures to clean up our water” in its 2024 general election manifesto.

Ofwat will make a final decision on water companies’ plans to raise bills from 2025 to 2030 in December.

Bonus payments to water company bosses rise to £9.1m amid sewage scandal

UK

Bonus payments to water company bosses rise to £9.1m amid sewage scandal

It was not just bonus pay that increased but pension contributions too, according to Lib Dem analysis of Company House records.

Sarah Taaffe-Maguire
Business reporter @taaffems
Monday 21 October 2024 

Sky News

Bonuses to water company bosses rose this year to £9.1m - despite record sewage discharges and financial woes at some utilities.

Executives from English and Welsh water firms received a total of £9,126,858 in the 2023/2024 financial year, up from £9,012,777 a year earlier, according to analysis of company filings done by the Liberal Democrats.

When base pay and pension contributions are factored in, total payments to executives reached more than £20m - slightly less than the year before when full remuneration was £20.2m.

Pension contributions also increased to £1.68m from £1.55m.

Base pay alone for water company seniors was more than £9.2m, less than the £9.7m recorded 12 months before.

It comes as a record number of sewage discharges went into British waterways.

Latest figures from the Environment Agency showed discharges of untreated sewage by water companies doubled from 1.8 million hours of discharges in 2022 to a record 3.6 million in 2023 while 464,000 individual spills were recorded - up from 301,000.

Under current rules, water companies can discharge sewage from storm overflows, but only during periods of heavy rain and under strictly permitted conditions.

Meanwhile, the UK's biggest water provider Thames Water faces nationalisation with experts saying the company is "uninvestable" as shareholders pull their investments, while its holding firm has defaulted on some of its £16bn debt pile.

Previous chief executive Sarah Bentley resigned just a day before news of a possible collapse of Thames Water came to light.

Who paid the most?

Despite the tough financial times, the utility was one of the companies that increased bonuses.

Bonus payouts nearly doubled from £746,000 in 2022/2023 to £1.26m in 2023/2024.

The biggest bonuses were paid by Severn Trent, who gave three executives £3.36m in bonuses, an increase from £3.319m year-on-year.

Calls for more regulation

The Liberal Democrats are calling for an immediate ban on bonus payments at all water companies while sewage outflows continue.

The party says it is pushing for a parliamentary vote to ban bonuses by tabling an amendment to the government's water (special measures) bill.

The bill has been introduced as part of the government's efforts to crack down on pollution and financial mismanagement in the water industry.

Proposals in the bill include the ability to jail executives and increased compensation for customers.

UK

Super sewer: Thames Water customers will pay £25 annual levy for another two decades to fund £4.5bn project

Ross Lydall
Tue 15 October 2024 


Thames Water customers will pay a £25 levy on their bills for about another two decades to repay the cost of the £4.5bn “super sewer”.

The 15-mile pipeline, which was officially declared in use on Monday, more than eight years after construction began, is being funded through a surcharge, currently three per cent, on domestic water bills.

A decade ago, when the project was first envisaged, Tideway, the firm that has built the super sewer, and Thames Water committed to charging “no more than £25 a year” at 2014/15 prices.

Andy Mitchell, chief executive of Tideway, said the project – which will drastically reduce the amount of raw sewage that ends up in the Thames - was “like a mortgage arrangement that quietly will be paid off over decades”.

How the super sewer works (Tideway)

Speaking to The Standard on Monday, Mr Mitchell said: “We believe this year that it will be at its peak. It will fall away thereafter.

“Quite at what pace it falls away really will be a matter between Tideway and Thames Water and the regulator every five years, to decide what should happen over the coming five years.

“It’s variable and decisions will be made in future decades as to how long that carries on.”

Thames Water has been approached for comment.

The project has created seven new public “piazzas” along the riverbank, including at Putney, Chelsea, Vauxhall, on the Victoria Embankment and beside Blackfriars bridge.

The space at Blackfriars – the largest of the seven - will be named Bazalgette Embankment, in honour of Joseph Bazalgette, the Victorian engineer who created the capital’s first sewage system.

“We don’t think he got enough credit for what he did, so we have been able to get that named after him,” Mr Mitchell said.

“This will be a continuation of what Bazalgette did. We hope it’s a place that people will enjoy for many, many decades to come.

“We have the Victoria site opposite site opposite the London Eye, which is going to be a fantastic site in future years to see the fireworks on New Year’s Eve.”

The original layout for Cycle Superhighway 3 will be reinstated next summer (TfL)

The capital’s flagship cycle route, the CS3 cycle superhighway, now known as cycleway 3, along the Victoria Embankment, is expected to be fully reinstated next summer, when Tideway vacate its riverside work site between Embankment Tube station and Blackfriars bridge.

Construction works have required the narrowing of the cycleway near the Tube station and the re-routing of the westbound and eastbound ramps that allow cyclists and vehicles to move between Blackfriars bridge and the Embankment.

Mr Mitchell said: “We are talking to TfL and have agreed that they will do that reinstatement. We are paying for it, but they will do it. Because we are demobilising it makes more sense for them to do it.

“As we finish that site next summer, we will vacate the space. That will allow TfL to put the superhighway back where it was before we started.”

The new piazzas that have been created on the Albert Embankment (Tideway)

The super sewer’s flood defences are operating in four out of 21 sites, all in west London – Acton, Barn Elms and two portals at King George’s Park.

Next week the central London portals at Victoria Embankment, Blackfriars Bridge and Albert Embankment are expected to come on stream.

All 21 sites should be in use by the end of the year. “We are hoping another six to eight weeks and we will be there,” Mr Mitchell said.

During heavy rainfall, they will direct overflows into the super sewer, which has been dug under the river between Hammersmith bridge and Limehouse, and takes the discharges direct to Beckton sewage treatment works in east London.

Prior to the super sewer opening, untreated sewage was discharged into the Thames about 60 days a year.

Mr Mitchell said: “This is going to make a fundamental difference into the health of the river.”

Asked about London mayor Sadiq Khan’s plan to make the Thames swimmable within a decade, Mr Mitchell said the super sewer would make it much cleaner – but he wouldn’t personally want to swim in the river.

He said: “If you are out there swimming in the tidal Thames, with all the traffic and a 7m tide range and the fast currents, arguably the quality of the water is the least of your problems. It’s not an advisable place to swim.

“But on the point of: ‘Will the water be an awful lot cleaner?’ Yes, it will.

“Technically, this water would be of a condition that – if that was the only consideration – you could [go swimming]. I wouldn’t.

Starmer sucks up to bosses and angers unions on Labour’s 100th day in office

The Labour government says it's had ‘warm engagement’ with DP World bosses who sacked 800 P&O Ferry workers two years ago

Workers march against P&O bosses in Dover in April 2022 

(Picture: Guy Smallman)

By Tomáš Tengely-Evans
Saturday 12 October 2024 

SOCIALIST WORKER Issue

Keir Starmer marked Labour’s first 100 days in office on Saturday by siding with bosses who’d sacked hundreds of workers on the spot.

Transport secretary Louise Haigh had described P&O Ferries—which sacked 800 workers in a brutal fire and rehire in 2022—as a “rogue operator”. “I’ve been boycotting P&O Ferries for two-and-a-half years and I would encourage consumers to do the same,” she said on Wednesday.

Her comments came the day before Labour unveiled its Employment Rights Bill, which is a step forward but falls short on the party’s pledges. It promised to “end unscrupulous fire and rehire practices”, but wouldn’t ban bosses from using the vicious tactic.

That still outraged DP World—P&O’s owner—which threatened to pull a £1 billion investment into the Thames Gateway port project on Friday.

Starmer slapped down Haigh in a BBC interview, saying, “Well, look, that’s not the view of the government.”

Whitehall sources told BBC News that there was “warm engagement” between senior figures in the firm and the government since Starmer’s criticism.

DP World bosses will now go to the International Investment Summit on Monday. Starmer, chancellor Rachel Reeves and business secretary Jonathan Reynolds are preparing to court big business at the conference.

Reeves and Reynolds supported “intense lobbying” from bosses to water down protections in the Employment Rights Bill.

Starmer is desperate to regain control after almost a month of scandals surrounding luxury gifts. Morgan McSweeney—a ruthless Labour right winger—was appointed as his chief of staff last week after Sue Grey was pushed out.

But the sense of panic remains for Labour and is opening up potential divisions. One ally of Haigh described the briefings as “disgraceful” and suggested the circle around the prime minister “are running out of friends.”

Labour’s support for big business is driving more tension with the unions, which had been more than willing to “give Labour a chance”.

Matt Wrack, FBU firefighters’ union general secretary, slammed Starmer’s criticism of Haigh as “unacceptable”. “Louise Haigh has the full support and solidarity of the FBU in setting out clear opposition to P&O and other rogue employers,” he said.

“Any backlash or briefing against Labour politicians and trade unionists who challenge or clamp down on firms that have been exploiting and abusing workers in that way is completely unacceptable, wherever it comes from.”

He added, “It’s outrageous that DP World is seeking to derail the extension of employment rights that Labour was voted into government to deliver.

“Rogue employers and corporate bullies cannot be allowed to hold a democratically elected government to ransom.”

A new YouGov poll this week showed that half of Labour voters are disappointed in Starmer’s government.

Starmer unpopularity goes deeper than the gifts scandal because Labour is committed to austerity mark 2 ahead of the budget on 30 October.

Labour MPs, including “soft left” figures such as Haigh, voted to keep children in poverty and snatch winter fuel payments from pensioners.

Earlier this week Wrack addressed an FBU rally of over 1,000 firefighters, who demanded Labour breaks with austerity.

He described the Labour government as an “opportunity” after 14 years of Tory rule. “The question is whether we seize that opportunity to fight for better conditions,” he said.

He warned “those who think it’s going to be easy under a Labour government”, pointing to the Tony Blair government’s attacks.

The Labour government is dashing hopes for what little change it promised, as it sucks up to bosses and prepares for a new round of austerity.

But struggle outside parliament—on the picket lines and streets—can win the transformative change working class people need. Let’s seize that opportunity by fighting back.

UK

Water firms ordered by Ofwat to pay back customers more than £157m
Sky News
Updated Tue 8 October 2024 at 3:23 am GMT-6·3-min read




Water firms in England and Wales have been ordered to return £157.6m to customers due to their poor performance.

Ofwat said the money would come off bills for households and businesses in 2025-26, with the total rebates set to be calculated in December.

Last year, the water regulator ordered firms to repay £114m as part of a similar move.

Ofwat said the results of its annual report on water company performance showed "disappointing results" and that money alone was not enough to address the problems facing the industry.

The regulator also warned that firms were "falling further behind on key targets", with nine out of 11 suppliers experiencing an increase in "pollution incidents" in 2023.

It comes as water bills in England and Wales are set to rise by an average of 21% over the next five years.

Ofwat's chief executive David Black said: "This year's performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.

"It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings."

He added: "Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the government or regulators tell them to act."

Ofwat's report also found that while there had been progress made on leaks, firms had only managed a 6% annual reduction – against a target of 16% by 2025.

However, four water companies – South East Water, South West Water, Thames Water and Yorkshire Water – were upgraded by the regulator from "lagging behind" to "average", but it said performance improvements were inconsistent across the sector.

Anglian Water, Welsh Water and Southern Water were all categorised as "lagging behind".

No firm managed to achieve the regulator's top rating of "leading".

Matthew Topham from We Own It, which is campaigning for the nationalisation of the water industry, said: "Today's action, while a welcome respite from skyrocketing bills, exposes the Catch-22 at the heart of water privatisation.

"Water firms, which desperately need cash to stay afloat, let alone invest to end sewage pollution, will rightly hand back millions they've unfairly taken from the public.

"[But] rather than punishing the shareholders behind these failures, our rivers and seas will suffer from even greater underfunding, and the public from future bill hikes in following years, to cover these costs."

Earlier this summer, the regulator announced it was investigating all wastewater companies due to concerns that some may not be meeting their obligation to minimise pollution.

In August, Ofwat announced that three firms - Northumbrian Water, Thames Water and Yorkshire Water - were facing a combined fine of £168m for a series of failings, including over sewage treatment.

Last year, industry body Water UK apologised on behalf of firms for "not acting quickly enough" on spills.

Years of under-investment by privately-run firms combined with ageing water infrastructure, a growing population and more extreme weather caused by climate change have seen the quality of England's rivers, lakes and oceans plummet in recent years.

Some water utilities are also creaking under high levels of debt or face criticism over dividends to shareholders and executive bonuses.

Environment Secretary Steve Reed said: "Our waterways should be a source of national pride, but years of pollution and underinvestment have left them in a perilous state.

"The public deserves better. That's why we are placing water companies under special measures through the Water Bill, which will strengthen regulation including new powers to ban the payment of bonuses for polluting water bosses and bring criminal charges against persistent law breakers.

"We will be carrying out a full review of the water sector to shape further legislation that will fundamentally transform how our entire water system works and clean up our rivers, lakes and seas for good."

Thousands of seals making Thames Estuary their home


A seal rests on the banks of the Thames in Hammersmith in March 2021

Almost 600 harbour seals and 3,000 grey seals now live in the Thames Estuary, the Zoological Society of London (ZSL), which runs London Zoo, has revealed.

Taking to the air and sea, ZSL conducted surveys by observing the seals from boats along the estuary and from RAF training flights above the coastline between Suffolk and Kent.

ZSL’s Hannah McCormick, who led the survey, said: “During the 2024 seal survey, we counted 431 harbour seals and 714 grey seals laying out on sandbanks along the Thames.

"By combining these with the number of seals estimated to stay in the water during the counts, we can estimate that there are a total of 599 harbour seals and 2,988 grey seals."
ZSL
Conversationist Hannah McCormick during the seal survey


“Seals are playful but shy creatures, so using a long-range lens to take photos from a distance allows us to maximise our counting accuracy while also minimising any disturbance – helping us build the strongest possible understanding of how these native species are faring in the Thames, and highlighting the importance of protecting this ecosystem.”

The count was completed over several days in August during the moulting season for the harbour seals.

Over the course of those weeks, the seals would have spent much of their day basking on the estuary’s sandbanks, making it easier for the survey team to spot them.

The Thames is home to both harbour and grey seals, although harbour seals are the only one of the two to breed in the area.

ZSL
Seals spotted on sandbanks during the survey in August


This year’s survey was consistent with results from the last few surveys, with 692 harbour seals and 3,134 grey seals having been estimated in 2021.

Ms McCormick explained: “We’ve seen UK seals make an incredible recovery from the early 2000s, when high rates of distemper virus led to steep declines in numbers.

"Results since 2018 suggest there has been a decline in harbour seals, which has also been seen in other harbour seal colonies in the east of England."


This seal kept returning to the banks in Hammersmith, west London, for a week in 2021 - prompting attention from residents


She added: "While the causes of these declines remain unknown, experts are investigating potential factors and by keeping a close eye on these changes.

"We will continue to build our knowledge of seals in the Thames while contributing to long-term regional and national data on seals.”

A ZSL-led report previously revealed that although the Thames was declared "biologically dead" in1957, conservation efforts had led to it once again becoming home to a wide variety of British wildlife including seals, seahorses and critically endangered eels.

UK

We are currently witnessing the re-privatisation of water

If despite predatory practices and huge extraction of returns, private companies are guaranteed to be rescued by the state, why should directors act responsibly?

Prem Sikka

Yesterday

Left Foot Forward.

The 1989 privatisation of England’s water industry is “an organised rip-off” and an unmitigated disaster. Water Companies have neglected investment in infrastructure and dumped tons of raw sewage in rivers, lakes and seas. As monopoly suppliers they have levied inflation-busting charges on customers; paid over £85bn in dividends and borrowed over £65bn to finance them. Over 28% of sales revenues vanish in servicing debts. Major companies have gearing ratios ranging from 500% to over 1,000%, and are struggling make debt repayments. Water regulator Ofwat and the Environment Agency have done little to curb predatory practices.

A crisis point has been reached. Water shareholders are writing off investment, debt is rated as junk, and Thames Water, England’s largest water company, is actively seeking to restructure its debts.

Special Administration Regime

Privatisation can only be ended by the state, but governments in bed with corporate interests are delaying the inevitable. Legislation for putting water companies into Special Administration Regime (SAR) is already in place. It enables the Secretary of State to put a failing water company into special administration whilst continuing to provide water and sewage services to customers. It enables the special administrator to ‘hive-down’ the operating business and assets into a new entity, facilitating a sale of a going concern business to a new purchaser and potentially leaving unwanted assets and liabilities behind in the seller group. Inevitably, shareholders and creditors will lose some value, but why would another buyer step in without guarantee of profits and subsidies to build infrastructure?

The SAR regime may be seen as a form of temporary nationalisation, but a Minister told parliament: “We have no plans to nationalise Thames Water or other water companies”.
Special Measures

The government’s strategy is to manage public anxieties and fatten-up failed companies for (re)privatisation. This is facilitated by the Water (Special Measures) Bill currently going through parliament. Clause 10 of the Bill enables Ministers to do almost anything to restructure water companies and hand them back to the private sector. It enables Ministers to modify water company licences. The explanatory notes accompanying the Bill state that

“The modifications can require a water company to raise amounts of money determined by the Secretary of State from its consumers, and to pay those amounts to the Secretary of State to make good any shortfall…”

What could the shortfall relate to? The Bill does not explain but it could be the cost of government interventions to make the company fit for purpose or resale. It could include cost of cleaning-up rivers, seas and lakes, writing off liabilities, providing sweeteners to potential buyers, and funds for investment, loans and guarantees. It is hard to see how companies are going to make the proposed £260bn investment in infrastructure without massive hikes in customer charges and/or public subsidies.

The government has stated that: “These powers would never be used to pay bondholders, shareholders or creditors … we do not expect customers to pay the price for water companies’ mismanagement … measures in the Water Bill will protect taxpayers”.

At the same time, the government has stated “that that the Secretary of State may provide financial assistance”.

It is hard to reconcile these statements.

The press release accompanying the Bill omits discussion of any of above issues. The Water (Special Measures) Bill also contains measures to improve accountability, governance and regulatory compliance of water companies. Regulators can bring criminal charges against law-breaking water executives, including imprisonment for failing to co-operate or obstruct investigations.

Since 2020, water chief executives have paid themselves over £41m in bonuses, and regulators will be empowered to ban bonuses for persons holding senior roles where companies fail to meet required standards relating to consumer matters, the environment, financial resilience or criminal liability. The government promises that regulators will consult experts covering areas such as the environment, public health, consumers, investors, engineering, economics and campaigners.
Special Measures are not so Special

The proposed governance reforms are fundamentally flawed. They rely upon regulatory bodies, such as Ofwat and the Environment Agency, to invigilate companies even though they have already failed in that task for the last 35 years. None owes a ‘duty of care’ to people.

For any system of regulation to be effective, there needs to be a distance between regulators and the regulated. However, that is not the case in the water industry. For example, two-thirds of England’s biggest water companies employ key executives who had previously worked at Ofwat. Executives of water companies and regulators regularly meet in hotels and private members’ clubs to discuss how to quell public anger over bill rises and sewage dumping. Collusion and cognitive capture is the order of the day.

Regulators are too close to the industry, as evidenced by the Pricing formula, codenamed PR24, used by Ofwat. It takes no account of the level of sewage dumping, unplugged leaks, lack of investment or frequency of regulatory sanctions. It uses a weighted average cost of capital based on fictitious gearing levels to inflate returns to shareholders. It guarantees real returns to companies and does little to protect customers or the environment. The regulatory independence is undermined by the regulator’s secondary statutory objective to promote growth and competitiveness of the industry. This conflicts with the requirement to protect customers and the environment.

Ministers claim that: “customers will have the power to summon board members and hold water executives to account through new customer panels with teeth”.

These panels will be handpicked by companies and/or regulators and will have no independence. If the government is serious about customer representations, it must ensure that at least 50% of the unitary board of water companies and regulators is directly elected by customers. Thus, they will be accountable to stakeholders and cannot be bullied or silenced by Ministers, regulators or companies.

Curbs on executive bonuses may excite some but won’t be effective. Any link to “financial resilience” requires regulators to specify and enforce optimal gearing/leverage levels, borrowing capacities, credit ratings, working capital ratios, capital adequacy and routinely undertake stress tests. How exactly will “resilience” be secured – by exploiting customers or shareholders providing a strong capital base? Ofwat have never shown any interest in such matters and has no independence or capacity to monitor or enforce the required financial standards. The Bill provides no details and matters will inevitably be negotiated behind closed-doors to the lowest common denominator.

Companies can bypass any bonus ban by increasing the basic salary of executives. Companies such as Thames Water are part of a complex corporate structure. It is perfectly feasible for their controllers to offer executives multiple directorships to compensate for loss of any bonus. It isn’t just bonuses, salaries may be undeserved too. The best way to deal with that is to empower customers to vote on executive pay. If customers are satisfied that executives have served the public interest they would approve salaries and even bonuses for extraordinary performance.

Regulators bringing criminal charges against law-breaking water executives are a good idea but the Bill camouflages reality. In practice, most of the sewage dumping is authorised by regulators as poor infrastructure can’t cope with the flows. Directors also have insurance to cover them for negligence in the pursuit of corporate objectives. The cost is woven into customer charges. The chances of directors personally bearing penalties are low, assuming that regulators succeed in securing convictions.

The Bill does not constrain water company ability to pay dividends. In March 2023, Ofwat announced that it is taking powers to enable it to stop the payment of dividends if they would risk the company’s financial resilience, and take enforcement action against water companies that don’t link dividend payments to performance. Despite sewage dumping and unplugged leaks, companies have continued to pay dividends. Under the Companies Act 2006, dividends can only be paid out of distributable reserves, which are essentially realised profits, but water companies do not disclose their distributable reserves. Such reserves are routinely inflated by financial engineering, such as capitalisation of some interest payments and repair and maintenance costs. Ofwat has taken no steps to curb financial engineering.

The Water (Special Measures) Bill may make minor difference but it essentially is part of political manoeuvrings designed to avoid bringing the failed water industry into public ownership as neoliberal state continues to guarantee corporate profits.

Private ownership of monopolies can’t resolve the crisis which is due to profiteering, excessive dividends, exploitation of customers and lack of investment in infrastructure. The new owners would enjoy a state guaranteed monopoly and want a return on investment. Thus, a continuing crisis and conflict with the general public is inevitable.

The Bill provides a thinly disguised framework for bailing out (and in) companies and returning then to the private sector. Cost will be borne by customers and/or the public purse. Reforms to governance lack details and their enforceability must be doubted. Reprivatisation introduces new moral hazards. If despite predatory practices and huge extraction of returns, private companies are guaranteed to be rescued by the state, why should directors act responsibly?

Columnist Opinion

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.

UK
Government criticised over Thames wastewater plan

Luxmy Gopal
BBC London
James W Kelly
BBC News

The Thames Water proposal would see treated wastewater pumped above Teddington Lock

The government has faced criticism over this week's approval of plans to pump treated wastewater into the River Thames in south-west London.

The Teddington Direct River Abstraction (DRA) would see treated sewage pumped into the river above Teddington Lock through an underground pipeline from Mogden Sewage Treatment Works.

Twickenham MP Munira Wilson said the Thames Water scheme could damage the the environment and human health.

Thames Water and the government say the plan is needed to help address the "skyrocketing" demand for water.

The scheme would provide up to 75 million litres of water a day during droughts and dry weather, but it would not be designed to run at these levels all year.

When submitting the plans for approval last year, Thames Water said it was the "cheapest" option available to provide enough water to increase drought resilience in London to a one in 200-year level.

It predicts it will need an extra billion litres of water a day by 2075 to account for climate change and growing population demand.

Former Olympic rower Ian McNuff, who lives along the River Thames in Teddington, told BBC London: "The more we looked at it and the more questions we asked, the more uncomfortable we became.

Ian McNuff says the plans are "not good enough"

"They cannot guarantee that they will cause no harm. They 'think' it will be as good as it is now but that's not good enough."

A Thames Water spokesperson said that no untreated sewage water would be pumped into the river as part of this scheme and no different to the current water supply system.

'Think again'


Ms Wilson, a Liberal Democrat, said questions about any chemicals that could remain in the river need to be answered before the proposals are taken forward.

"I want the government to think again. There are many other options available that we know Thames Water looked at but rejected because they say it's too expensive," she said.

An online petition launched in January 2023 to reject the plans has more than 30,000 signatures.


The Twickenham MP says questions need to be answered


The Department for Environment, Food and Rural Affairs said the plan was needed to meet increased water supply needs that come with "rapid population growth" in the south east and climate change.

It added: "That is why this government is committed to increase our water supply while protecting the environment and public health.

"We are going further by introducing legislation to clean up our waterways, attract private-sector investment for upgrades and speed up the building of water infrastructure."

UK

Water firm announces investment to cut discharges

they had failed to adequately invest in and maintain their networks, leading to repeated releases of raw sewage into the country’s waterways.

David Mckenna
BBC News

Yorkshire Water
Yorkshire Water said it is spending £3.4m to reduce discharges to the River Humber


Yorkshire Water said it is investing £3.4m to improve and upgrade storm overflows in two parts of East Yorkshire.

The projects, in Brough and North Ferriby, are part of the firm's £180m investment to reduce discharges and improve water quality in the region.

A spokesperson for the company said it would reduce discharges to the River Humber.

The firm is one of three facing sanctions from the industry regulator, alongside Thames Water and Northumbrian Water, over historic sewage spills.


Commenting on the double scheme, project manager Lumi Ajayi said: “These important upgrades to the storm overflows will prevent infiltration from the Humber and reduce storm discharges and overflows into the estuary during periods of prolonged or heavy rainfall."

It was announced in August that an investigation by Ofwat found that on average Yorkshire Water discharged untreated wastewater into the region's rivers for seven hours a day in 2023, with almost half of its storm overflows found to be in breach of regulations.

It found they had failed to adequately invest in and maintain their networks, leading to repeated releases of raw sewage into the country’s waterways.

Yorkshire Water said it took its "responsibility to protect the environment very seriously".

Thames Water boss 'untroubled' by prison threat - and says he can save company

Chris Weston told Sky News he is confident he can turn around the troubled company, which faces running out of cash in months if it cannot raise fresh equity.

Paul Kelso
Business correspondent @pkelso
Thursday 5 September 2024 
0:53

The chief executive of Thames Water has insisted he can rescue the debt-laden utility, which faces running out of cash in months if it cannot raise fresh equity.

Speaking after the environment secretary announced new legislation threatening water company bosses with jail alongside a review of the industry, Mr Weston told Sky News he was untroubled by the threat of prosecution, and confident he can turn around the troubled company.

"I need to digest what the secretary of state said today, I am completely aligned with what he's trying to do in cleaning up the rivers," he said.

"I'm focused, like he is, on getting investment and I will work with the secretary of state to do that. I am very encouraged by the tone I heard and I will work with him to try to do what he's outlined to do."

Asked directly if he could save Thames Water, he said: "I can save it."

With around £18bn of debt and cash reserves only until next May, Mr Weston is racing to raise fresh investment after existing shareholders withdrew plans for £3.5bn of fresh equity.



Last week the company asked regulator Ofwat to allow it to increase customer bills by more than 50% in exchange for investment of more than £20bn. Previously Ofwat capped future Thames bill increases at 21%.

If Mr Weston fails to raise fresh capital or persuade bondholders to take a loss, Thames Water may fall into special administration, effectively nationalisation, leaving taxpayers liable until it can be sold to new owners.

The current shareholders have written off their investment.

Water companies face customer anger over dividends and bonuses

Thames Water is the most extreme example of the challenge facing the privatised water companies, under acute pressure to reduce sewage outflows and modernise infrastructure using private investment, while limiting bill increases.

They face huge customer anger at the scale of dividends and bonuses paid to shareholders and executives in the three decades since privatisation, payments they argue are necessary to maintain a privatised system.

As well as new legislation giving Ofwat and the Environment Agency enhanced powers, Environment Secretary Steve Reed announced a review of the entire industry that will begin in the autumn.

Water industry figures welcomed the move, believing it would give them the opportunity to make the case that investors require a more generous return than they are currently allowed to offer by Ofwat.

'We all want the same thing'

In the audience to hear him set out his plans were some of the bosses Mr Reed said have paid themselves £41m since 2021 in bonuses and incentives, including Mr Weston and Liv Garfield, chief executive of Severn Trent, the highest-paid water executive.

Susan Davy, chief executive of Pennon Group, which owns South West Water, told Sky News: "We all just want the same thing and we're going to focus on making sure we deliver for communities."

Asked if she was concerned about the threat of prosecution she said: "I'm just going to focus on what's best for communities and customers."

UK

The government must abandon Tory policies and give people hope

Prem Sikka 

Yesterday

Left Foot Forward

The government is continuing with Tory policies which would deepen despair and push more people into the arms of right-wing extremists.

Next week, the UK parliament returns from its summer recess for a two-week session. The Labour government is likely to face considerable scrutiny of policies which have curtailed its post-election honeymoon.

After 14 years of Conservative rule, erosion of household incomes and public services, Labour won the July 2024 election with a promise of ‘change’ though its election manifesto was light on policy details. Whilst it is too early to reach any definitive conclusions, the concern is that the government is continuing with Tory policies which would deepen despair and push more people into the arms of right-wing extremists.

The early sign of continuing with Tory policies is the retention of the two-child benefit cap, introduced by the Conservative government in 2017. It denies child allowances in universal credit and tax credits worth up to £3,455 per year to third or subsequent children born after April 2017. 450,000 households and 1.6m children are affected by the cap. Some 4.3m children, 30% of all children, live in poverty. Abolishing the cap would cost the government between £2.5bn and £3.6bn in 2024/25. Just £1.7bn would lift 300,000 children out of poverty and reduce poverty for another 700,000 children. This would increase family income and stimulate the local economy too. The government was not persuaded and saw off a rebellion in its own ranks by withdrawing the whip from seven Labour MPs.

The government added fuel to anger by abolishing the universal right for pensioners to receive winter fuel payment (WFP) and deprive 10m of payment of between £100 and £300 to cover higher heating costs in winter. The average state pension is between £9,000 and £9.500 a year, which is less than 50% of the national minimum wage. It is the main or the only source of income for most retirees. Nearly 1.4m pensioners receive mean-tested pension credit, worth £3,900 a year. Some 880,000 eligible pensioners do not claim it because they can’t negotiate the regulatory maze, or lack access to computers. Last year £2.2bn went unclaimed.

Despite benefits and the triple-lock, 2.2m UK retirees live in poverty, 2.5m skip meals and 1.3m are at risk of undernourishment. Last winter, despite WFP there were 5,000 excess pensioner deaths as pensioners could not afford to eat and heat. Each year, around 68,000 senior citizens die in poverty.

This abolition of universal WFP was not in Labour’s election manifesto. It was not preceded by any public consultation or warning and no impact assessment has been produced. “The Social Fund Winter Fuel Payment Regulations 2024” which abolishes the universal right is being introduced as a Statutory Instrument and is expected to come into force on 16thSeptember. The new policy is to means-test the WFP and only pensioners with annual income below £11,336 would be receive it if they can fill a 22 page form and answer 243 questions. Two million more pensioners could be pushed into poverty.

The government claims that the new policy would save £1.4bn a year. Such savings are insignificant as the government is expected to spend some £1,226bn in 2024-25. The £1.4bn saving is doubtful as no mention is made of the costs associated with means-testing and dispute resolution. Due to cold and sickness, more pensioners would need hospital admissions and would increase the cost of healthcare. With erosion of incomes, pensioners would spend less and that would damage the local economies. In any case, successful claim of additional pension credits and related benefits by 880,000 pensioners could cost up to £4bn and wipe out the £1.4bn alleged saving.

The government had a number of policy alternatives. For example, it could have introduced a taper, added WFP to total income so that richer pensioners would pay income tax on it and taxed the rich to raise revenues to retain universal WFP. It ignored all alternatives. The loss of up to £300 of WFP comes at a time when household energy bills are set to rise by 10% or around £150 from October. Since March 2021, tax exempt personal allowance has been frozen at £12,570 a year, and pensioners with modest additional incomes are being hit with income tax. Since 2020-21, the number of pensioners paying income tax has creased by over than 2m, from 6.47mn to 8.51m.

It isn’t just pensioners; low income families are also suffering from high energy bills, and cost-of-living crisis, and deserve support. Some 17.8m adults have annual income of less than £12,570. Despite social security benefits 12m people live in poverty. In England alone, some 13% of households (3.17m) live in fuel poverty. A root cause of this is low wages and corporate profiteering. Last year British Gas announced a ten-fold increase in its profits. BP and Shell have made record profits. Since the pandemic, electricity generation companies have increased their profit margins by 198%. The government’s refusal to tackle profiteering will inevitably erode living standards and cause public disenchantment.

Water is another disaster looming and the government is content to leave this monopoly in private hands, just like Conservatives. Despite inflation-busting hikes in customer bills water companies have a long history of under investing, dumping raw sewage in rivers and seas and not plugging water leaks. Since privatisation in 1989, companies have paid more than £85bn in dividends mostly financed by borrowing of more than £60bn. Now they are struggling to service debt and make the required investment. This week Thames water, the UK’s largest water company, with a debt pile of £18bn urged the regulator to hike household bills by 59% or £228 a year. The companies leading shareholders consider their investment to be almost worthless. Its debt is rated as junk.

Public ownership of water industry is widely supported by the public but that is not what the government wants to do. Instead it has offered some gimmicks such as tighter rules to stop polluters from using four-star ratings to justify high CEO pay. In response to my question in parliament, the Minister ruled out nationalisation by claiming that “It would cost billions of pounds”. When asked to share the government’s calculations, the Minister referred me to a 2018 report by Social Market Foundation, a right-wing think-tank, which estimated the cost of water nationalisation to be £90bn. This included £41-44bn for equity. This report is described by a former government adviser as having “virtually no intellectual substance and the [£90bn] figure was wrong”. He added that the process of renationalisation itself would be “relatively easy, as with the revenues from the water bills, the government would have sufficient income to pay for the assets it acquired”. Of course, no government would buy the debt for £46bn.

The minister provided no reference to any government calculation, alternative source of data or anything more recent. For example, in 2019 Moody’s, a rating agency, considered shareholder equity in water companies to be worth only £14.5bn. Since then, if the state of Thames Water is anything to go by, water company shares have become worthless and debtholders are facing major losses. The government is continuing with Conservative policies, by obfuscation.

Elsewhere, the government is committed to further deregulating the finance industry and reducing capital adequacy requirements. It is seduced by claims that this would somehow release £100bn for investment. It is mistaken. There is no pot of gold sitting in boardrooms that can be emptied. The money is held in assets and capital buffers which would need to be liquidated and would inevitably affect resilience of the industry with deadly consequences. The government is also rolling-back on its commitment to protect workers’ rights which could reduce job insecurity. Chancellor Rachel Reeves has promised employers that government will ‘co-design’ reforms with business.

This week, the public backlash persuaded the Prime Minister to make a statement which remained light on policy details, and there is little relief from Tory policies. The government is planning to raise taxes and cut spending in October budget though the Prime Minister promised that “those with the broadest shoulders should bear the heavier burden”. That hasn’t been evident so far from policies on children and pensioners.

The government is committed to economic growth but it is hard to see how that can be achieved without increasing disposable income of the masses and direct state investment in infrastructure and new industries. The government has boxed itself into a corner with its pre-election pledges of not increasing taxes on the rich and additional borrowing. Such promises are not sustainable. The government must abandon Tory policies and give people hope or risk social disorder and pushing more people into the arms of right-wing extremists.

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.