AN investigation has discovered that shareholders of Northumbrian Water have pocketed hundreds of millions of pounds in the past five years, bringing with it fresh calls to renationalise the water industry.

The issue was also brought to the fore of the public eye last year, when renationalisation of the water industry was included in the Labour Party’s manifesto for the general election.

Northumbrian Water, which is owned by CK Hutchison Holdings, a multi-national conglomerate registered in the Cayman Islands and headquartered in Hong Kong, has paid out more than £530m in dividends in the past five years, with £222m paid out last year alone.

The figures come from a joint investigation into Northumbrian Water’s accounts by the GMB trade union and research group Corporate Watch.

In June, GMB unveiled its Take Back the Tap campaign, which aimed to return England’s privatised water industry into the hands of the public.

The campaign was launched at GMB’s 101st congress in Brighton, after a similar investigation found that the company’s CEO, Heidi Mottram, had taken home £4.6m in the past five years, including more than £1m in 2017 – a fee several times higher than the salary of the Prime Minister.

The union also pointed out that while shareholders had been pocketing all that money, water bills in England and Wales had increased by 40 per cent above inflation since privatisation in 1989, according to a report by the National Audit Office.

The GMB’s report also criticised the fact that some areas of the UK were seeing a hosepipe ban as a result of the heatwave, when the latest leakage figures for United Utilities showed that 439,200,000 litres of treated water were being wasted each day.

GMB general secretary Tim Roache said: “Forking out billions to shareholders, while bills rocket and trillions of litres of water are wasted shows just how broken the system is.”

In September last year, a poll found that renationalising the water industry was supported by 82 per cent of consumers – however, this figure dropped to 42 per cent in April last year after the Social Market Foundation claimed that nationalising water could cost taxpayers up to £90bn.

Although the water industry was nationalised for much of its history, most water works in the early 19th century were privately built, owned and maintained.

However, following the efforts of advocates like Liberal politician Joseph Chamberlain, the industry slowly came under government control.

In 1884, Chamberlain argued: “It is difficult, if not impossible to combine the citizens’ rights and interests and the private enterprise’s interests, because the private enterprise aims at its natural and justified objective, the biggest possible profit.”

Tim Roache added: “We all need water, it’s not an optional extra; it’s absurd that something we all depend on is in private hands delivering eyewatering pay- outs instead of being run for the public good. That’s why GMB is calling for the water industry to be brought back into public ownership.”

Water supply and wastewater disposal was the responsibility of local authorities before the creation of 10 regional water authorities in 1974.

However, in 1989, following a decade of low investment, each of the 10 RWAs were sold to the private sector.

The sale brought in £7.6bn, but Margaret Thatcher’s government took on the sector’s debt of £5bn, as well as providing a further £1.5bn of public funds.

As significant an expenditure as this was, it was a drop in the ocean compared to the £24bn-£30bn estimated to have been needed to bring the industry in line with new European regulations and to meet the backlog in infrastructure maintenance.

While the calls for renationalisation have been growing louder from some quarters, there are still many vocal supporters of a private water industry.

Many of these point to the vast investment in infrastructure by the privately-owned water companies, such as the new £46m water treatment works at Horsley.

While Northumbrian Water chose not to comment on the issue, Water UK’s chief executive Michael Roberts has been a vocal supporter of the privatised industry.

In June, he questioned whether a nationalised water industry would deliver the same level of investment and results as the privatised industry, given other pressures on government spending. In July, Mr Roberts spoke to MPs at a Water UK parliamentary reception and pointed out the huge investment made by the private water companies.

He said: “On nationalisation, we would say this raises big questions. The prospect of a state-owned sector struggling to be a priority for public spending carries risks which need to be considered carefully against the positive work achieved to date by regulated private companies.

“Consider, for example, the £150bn invested by companies in improvements since 1989, and the £8bn a year which they continue to invest.

“Then there’s the fact that customers now are five times less likely to suffer from supply interruptions and eight times less likely to suffer from sewer flooding, and rivers that had been biologically dead since the industrial revolution have revived, with the return of wildlife.

“This has been achieved with customer bills averaging about £1 a day – bills which are pretty much the same in real terms as in 1994, and which are due to be five per cent lower by the end of the current industry five-year planning period in 2020.”

In short, there is certainly a case for renationalising the water industry.

However, whether or not a government-controlled sector could, or would, match the enormous investment made by private companies is another question altogether.