Liv Garfield, the boss of FTSE 100 water giant Severn Trent, is trying to bring a taskforce of utility bosses together with the Labour party in a bid to head off the threat of nationalisation.
In an email sent to other utility CEOs which she describes as “sensitive” and “highly confidential”, the £4 million a year Garfield asks them to join an “off-the-record roundtable” with Will Hutton, the Observer journalist best known for books critical of capitalism including The State We’re In.
Her move comes as water companies face the threat of being re-nationalised, decades after they were privatised as one of Margaret Thatcher’s free market reforms.
She writes: “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.”
She adds: “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.”
Garfield, one of a handful of female bosses of FTSE 100 companies, warns her colleagues: “The Labour leadership is aware we are soft testing various ideas but have asked us to keep it highly confidential so please don’t forward this email.”
Ministers are already discussing plans to seize control of Thames Water in the wake of intense criticism over fears of a financial collapse that saw the abrupt exit this week of CEO Sarah Bentley. Utility bosses are concerned that others could be next.
Garfield says that utility sectors such as water, energy and telecoms, should have “clear social purpose” while remaining highly profitable.
Bills for all utilities have soared lately. Garfield takes a swipe at former PM Liz Truss in the email: “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.”
On Labour, she says her new taskforce should, “Seek to ensure that any manifesto commitment emphasises the importance of independent economic regulation, something to which investors attach huge weight”.
Not all of the CEOs she contacted are supportive of her plans. One said bluntly, “this is not our problem, it is hers”.
Severn Trent has been approached for comment.
Severn Trent is one of the biggest water companies in the UK, supplying nearly five million homes. It has 7000 staff and a stock market value of £6.5 billion.
The firm has reported strong profits this year but admitted it should have given sewage leaks “much more attention and acted faster”.
