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The boss of Severn Trent has called in an urgent meeting with utilities bosses in an effort to ward off the threat of nationalisation under a potential Labour government.
Liv Garfield, who is paid £4m-a-year to lead the FTSE 100 company, sent an email to her counterparts asking them to join a roundtable to discuss the future of the utilities industry and the potential for reinvention as “social purpose” companies.
Marked “sensitive” and “highly confidential”, Ms Garfield’s email said the roundtable would be an opportunity to “soft test” ideas to be submitted to the Labour party.
Business chiefs are braced for a potential Labour win at the next general election which is expected to take place as early as May 2024.
Ms Garfield said a taskforce of industry chiefs should seek to push Labour away from greater intervention, despite calls for the water industry to be nationalised.
She suggested that one alternative could be repurposing company structures so they can still make a profit but with the requirement to have a “special duty”.
Bosses should “seek to ensure that any manifesto commitment emphasises the importance of independent economic regulation, something to which investors attach huge weight”, she said.
In her email, which was first reported by the Evening Standard, Ms Garfield, added: “Whilst it is clear Labour will not include nationalisation in its next manifesto, they are also not keen on entering into the election race championing the status quo. The leadership thinks there is room for improvement and, politically, there is significant pressure to ‘do something’ about utilities.
“One idea we believe might be attractive to the Labour leadership is re-purposing utilities and utility networks into a new breed of declared social purpose companies – companies that remain privately owned, who absolutely can (and should) make a profit, but ones that also have a special duty to take a long-term view.
“The UK is entering a period of heavy investment in infrastructure (£650bn over the next 10 years, according to some reports) and the last thing we want to do is push-up (Truss-style) the cost of investment.”
It comes as Britain’s water industry is mired in turmoil. Thames Water, the country’s biggest supplier, is scrambling to convince investors to inject £1bn of new capital into the business.
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