GMB reply to Ofwat’s response to Frank Field MP letter

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GMB reply to Ofwat’s response to Frank Fields letter regarding Anglian Water pension scheme

Labour’s plan to bring water back under public ownership can’t come soon enough for beleaguered employees but we fear if it ever happens there will be very little left to protect, says GMB London

GMB, the union for staff in the water industry, have responded to the economic regulator of the water sector in England and Wales,

Ofwat, following their reply to a letter sent by Member of Parliament for Birkenhead Frank Field criticising the water pension cuts. [See notes to editors for Frank Field’s letter to Ofwat, and for Ofwat’s reply]

Mr Field wrote to Ofwat following a letter from GMB on 6 March calling on him to put pressure on Anglian Water who were ‘impervious to the concerns of its employees’. [See notes to editors for GMB’s letter to Frank Fields] 

On the 28 March Frank Field MP wrote to Ofwat’s chief executive Rachel Fletcher, following Anglian Water and United Utilities decision to close their final salary pensions schemes to future accruals. Field said the proposals should be seen in the context of the companies’ "considerable profitability and their munificent attitude to shareholders."

In Fletcher’s reply, dated 12 April, she wrote: “Ofwat is concerned that some water companies have been more focused on boosting returns than on serving their customers and fulfilling the special responsibilities that go with being a monopoly provider of an essential public service.” The letter highlighted that the regulator recently launched an “ambitious programme” of reforms to get the sector “back in balance”, which will sit alongside a “tougher regulatory settlement” from 2020 onwards.

Michael Ainsley, GMB Regional Officer said:

“Ofwat’s response to Frank Field MP is all very well and good but Rome is burning while the government and their lap dog fiddles.

“Ofwat’s view of what is fair and appropriate for workers and their pensions takes no account of the fact that the water companies use the same lily livered subjective view when unilaterally deciding what’s ‘fair’ and appropriate for their workers and their pensions.

“Water companies are right now preparing to protect their shareholders from the full effect of ‘ambitious programme’ of reforms to get the sector ‘back in balance’, and ‘tougher regulatory settlement’ from 2020 onwards, by continuing to cut pensions and outsource workers to the lowest bidders to rid themselves of the inconvenience of employing people directly and all associated employment costs.

“Labour’s plan to bring water back under public ownership can’t come soon enough for beleaguered employees but I fear if it ever happens there will be very little left to protect.”


Contact: Michael Ainsley 07974 250 947 or GMB London Press Office 07970 114 762

Notes to Editors

1] Frank Field MP letter to Ofwat Chief Executive Rachel Fletcher (28 March 2018)

2] Ofwat Chief Executive Rachel Fletcher letter to Frank Field MP (12 April 2018)

3] GMB letter to Frank Field MP (6 March 2018)

Dear Mr Field

I am writing to you in your capacity as chair of the Commons pensions committee and in the wake of the Carillion Scandal and in the hope that some pressure can be brought to bear on Anglian water who thus far are impervious to the concerns of its employees.

Anglian water is one of Britain’s biggest water suppliers, serving 6m homes and businesses; they have taken the decision to end the Defined benefit pensions for their employees, but as you will know, the Water industry is a regulated business and has no direct competitors; therefore the decision isn't because of a business need but Business greed.

It is about a transfer of wealth from customers and staff to shareholders. The owners of Anglian Water are the Osprey consortium of investors which are mainly Australian and Canadian investors linked to pensions. And now to add insult to injury 3i Infrastructure have sold their 15% holding for £580m to the infrastructure investor Dalmore Capital and a group of council pension funds from Manchester, London, Lancashire, West Yorkshire and Merseyside, which form GLIL Infrastructure.                                                                                                                    Anglian is taking from its employees to give to both overseas and our own local authority pensioners.

The Water industry was given the opportunity to pay off 50% of deficit of their schemes directly through customers’ bills by OFWAT the industry regulator but even though Water companies were given this exception they are still looking to close the schemes, though they are inherently less risky now.

Anglian Water maintain that pressure from OFWAT is dictating that they need to close the scheme, which OFWAT deny, as their  job is to regulate the industry not dictate workers terms and conditions within the industry. OFWAT and Anglia Water need to be frank about their roles in the proposed closure of schemes in the industry and if OFWAT believes it can sector bargain for the industry then the unions involved will want a seat at their table.

The water industry is a monopoly under investing in infrastructure, over-charging customers and cutting its workforces Terms and Conditions to the bone in the pursuit of profit for its shareholders. It state supported transfer of wealth from UK consumers and workers in to the hands of foreign shareholders and investors.It is a scandal that customers have footed the bill while the water industry made profit, but those same water companies are now closing final salary pension schemes to maximise profits at the cost of both employees and customers.

Recent research by the Labour Party has shown that water companies including Anglian have paid more than £13.5 billion to shareholder since 2010. It also showed that these very water companies paid less tax than they got in tax credit. This is turbo-charged corporate welfare at the expense of workers and communities.

The unions are balloting their members in a consultative exercise which looks as though will deliver a rejection of the employers planned closure, but Anglian show no sign of backing down.

I look forward to your reply

Yours sincerely

Michael Ainsley

GMB London regional organiser