New Vision for Water - a mirage or worse?

We are talking about the government's proposed new laws to reform the regulation of the water industry. It's New Vision for Water.

"Is it me, or is the 'new regulator' basically a glorified business manager with a remit to ensure the business runs smoothly and stays in profit?"

These are not my words; they came from a member of the public who has seen straight through the slick, glossy brochure and recognises that, if this legislation is brought in, the consequences for our waters, health and bank accounts will be disastrous.

Yet, from parts of the Environmental NGO world that should know better, we hear partial praise and that this legislation does not go far enough. The truth is, it goes way too far and in completely the wrong direction.

Here's why:

It started with a trick based on lies so what do we expect?

The New Vision for Water is the product of the 'independent' water commission conducted by Sir Jon Cunliffe. It was set up to review water industry regulation, which is controlled and overseen by the government, specifically the Department for Environment, Food and Rural Affairs (Defra), which holds full responsibility for allowing the sewage scandal to develop. Government may pretend otherwise, but the buck stops there with the civil servants and the string of Secretaries of State who were led or advised by them over the years.

Defra set the terms of reference for the review into itself at the end of 2024to end the growing demand for the 'root and branch review' that was being demanded by the ever more influential Feargal Sharkey; a review that might find out the truth. A master stroke by Defra; it forbade Sir Jon from investigating its own conduct as it threw away the opportunity to learn from the worst mistakes. It was to be 'forward-looking' and tightly controlled, and as Defra also acted as the secretariat, reviewing and sorting the evidence, and then writing the report, with a figurehead being steered from the outset, independent, it was not.

Its big overarching mission was to review regulation to make it more attractive to 'investors', and it came after a bunch of the powerful funds met with the Environment Secretary, Steve Reed, and said they didn't like it. See our Blog The Watered Down Commission for the evidence.

It was carefully designed to avoid considering the introduction of public ownership at all costs, because compelling evidence to a genuinely independent commission would undoubtedly have presented that as the obvious solution. A review to please the shareholders could hardly succeed if it took away their flock of captive golden geese - you and I.

That insidious exclusion was based on false claims that it was too expensive to rid the industry of parasitic shareholders, and it turned out that the government, via Defra, had relied on a report written by a think tank, commissioned by water companies to get that high cost, which had been shown by the eminent economist, Prof Sir Dieter Helm, to be utter nonsense.

When that fake figure was rumbled, Defra went to Ofwat to get the value of water companies based on their regulatory capital value (RCV), which is, in simple terms, a made-up number that adds together what companies have spent on things - your money, by the way.

To borrow an analogy from Lord Prem Sikka, Professor of Accounting and House of Lords veteran of challenging deceit, this is like buying a Ford Escort for £3K in 1989 and adding up the cost of the tyres, batteries, exhausts, servicing, fuel tax, insurance and parking tickets etc, paid for ever since, and by 2026, even though it is worn out and won't start, claiming it is now worth £50K.

Years of neglect. A water Company parallel.

The RCV of Thames Water is claimed to be over £20 billion but clearly the company is worth nothing like that, and more like nothing, as it owes about ....£20 Bn.

And it is not just Thames Water that runs its assets into the ground while claiming high values. This horror show comes courtesy of United Utilities.

That's years of neglect that was exposed by Matt Staniek of the Save Windermere campaign. Imagine, this is at a multi billion pound company's sewage treatment works.

If the commission had done the sensible thing and looked back forensically, it would have discovered what specialists like economist Prof David Hall, former auditor Stanley Root, and others had proven, that water company owners do not bring in cash, they take it out. That should be the end of the conversation about privatisation, but such is the value of the scam of 62 million people that huge efforts are made to keep that money flowing out and into the hands of clever financiers, and so the myth continues.

It is a fantastic trick; collect and spend captive billpayers' money, and then charge them ruthlessly for doing it. If you want more money, create a crisis and force bill increases. The water shareholders (we refuse to call them investors) have taken at least £85 billion for simply owning a stake that they will sell, usually at a profit - but maybe not this time and that is why the fight is on, so the government has been called in to help.

Interestingly, this is a government whose party (Labour) took £4M from a Hedge Fund on the run-up to the 2024 election and declared it only afterwards. A government with close ties, for example, to BlackRock, the massive global asset manager that bought a majority stake in wastewater contractor Lanes Group in 2024 and has increased its holdings in the water sector, including United Utilities, Severn Trent and the Pennon Group (the notorious South West Water).

Buying into water, something none of us can give up and have to pay monopolies protected from nasty regulation by the government. What predator would not be attracted by the smell of that?

This is what the public and NGOs are up against. Powerful organisations that have the ear of our most senior politicians and a bargaining power that ordinary people only have a brief taste of at election time. They have it every minute of every day. Environmental NGOs engaging with government? Well the fact that we live in one of the most nature-depleted countries in the world answers that question. It is clear that the 'seat at the table' in exchange for not causing too much fuss and taking the funding to try to mitigate some damage recipe, has cooked up a toxic pie that is only really good for polluters, shareholders and creditors.

And by the way, the savvy Blackrock Chief was a great supporter of the PM before the election.

It is hard to know if politicians feel they owe something to their influential supporters whose profits and losses are affected by government policy.

Back to water shareholders in general; funds that have taken out huge loans, often simply to hike the dividends that they extracted. These organisations are not only not needed but are an obvious and dangerous liability, but Defra made sure that could not be the finding of the commission. Yet it is the only truth that matters.

So how does a government defend such a blatant trick played on us all? From the start of the commission to right now, the Secretaries of State 'for the Environment', first Steve Reed, and now Emma Reynolds on line 5 of her foreword to the Vision for Water, have both been repeating the blatant and easily demonstrable lie that £104 bn of private sector investment is being brought in to sort out the shambles. It isn't; this is billpayers' money, secured by hiking bills.

What can we say? It's a lie and the Secretary of State knows it, as her predecessor did. This is billpayers' money.

£104 Bn investment is mentioned 6 times in the government's glossy brochure, with the final reference ironically providing proof that the claim this is an injection of private money is in fact...a lie

Screenshot from the A New Vision of Water Document. Telling blatant lies to the public and being caught out - when did that stop requiring resignations or sackings.

Pause for a question: Knowing that the review was like inviting the Mafia to help develop new laws to make organised crime more attractive to criminals who don't like risks, but pretending that robbery, extortion and blackmail are not crimes if there is a plan to do less of that sometime, should we think that the white paper still might contain things that may be good for the victims and so it is worth working with it? No - let's not be that stupid.

The White Paper proposes making one super regulator. Coincidentally, Sir Jon was given a massive hint to combine the regulators because Defra had already decided that 'fragmented' regulation was a problem.

Was it? No. Successful water industries, such as in Sweden and Denmark use multiple regulators. Divisions like that help to avoid corruption.

The problem was that Defra would not let them do their job or was happy to let profiteers run amok because it was not government money from tax, it was billpayers' money, and it didn't matter and it still doesn't.

If water companies pay a ridiculously extortionate £16M to install three tanks worth £390K (this happened) it doesn't matter because that is going into the economy (evenif it is to overseas shareholders) via groups like Lanes Group - the company acquired by Blackrock, a clever organisation that will be looking into the future and seeing a lot of high value infrastructure projects coming.

What was wrong with regulation? It needed to be done effectively, according to the law, as discovered by the Office for Environmental Protection, which found that Ofwat, the EA and Defra hadn't been doing that. Regulation also needed an industry that was 'regulatable', but controlling private equity has been way out of these regulators' league and always will be, and why should the billpayer and taxpayer have to fork out massive sums to try to control it? The evidence? The past 35 years of the privatised profit fest.

Once again, we don't need shareholders, we need a water industry providing infrastructure to protect the environment and allow housebuilding capacity and a water supply for a growing population. Despite the promises, privatisation did not deliver that.

Ironically, we had finally seen Ofwat start to get tough, as the government kept claiming it wanted, when it 'fined' Thames Water £123M, including £18M for effectively stealing money as dividends, and Ofwat acted far more swiftly than the EA ever could.

But it turned out that was not what the government really wanted; it wanted to attract more investors (predators). So before the Defra ink on the far from independent report was dry, its media machine was already accepting the whole thing and singling out Ofwat to be blamed and disbanded, and soon its CEO was off to new pastures to read up on what 'get tough' means in government language.

All the regulators are being merged so why was Ofwat singled out for abolition. Was it to appease Thames Water owners and sweeten a 'rescue' deal?

Worryingly, what combining the regulators really does well is to make it a so much tidier body for the industry to capture and control. This has been taken to a new level by proposing bespoke regulation for each company to help companies 'deliver', especially to ensure its shareholders get a 'fair return' (like money for nothing at excessive rates has been a bad deal), and to make sure they don't have to worry about annoying fines for a bit of profiteering, and certainly make sure board members never see the inside of a Crown Court. Linking the performance of teh regulator to the performance of the companies is the ultimate capture.

We think it would have been far more difficult for campaigners like WASP to have penetrated the regulators' machinery in respect of dodgy goings on if they had been one unit. The Environment Agency was and still is very secretive about what it does and will not even share the financial interests of its Area Directors and whether they have incentives like shares in water companies, for example.

Ofwat , on the other hand, has been far more transparent, honest and helpful. By the way, it won't allow its staff members to own water company shares - surely the basic requirement for any regulator - don't have an interest in the company you are regulating!

Then come the gimmicks in the Vision for Water. A Chief Engineer for the regulators? Sounds great, but why? Almost certainly coming from the water industry, to do what? To second-guess the engineers of the ten companies that apparently need regulation tailored to their needs? To take the blame when things go wrong, to protect the illusion that has allowed water companies to charge ridiculous sums like the £435M in 2025, rising from £40M in 2021 that was earmarked for a mere upgrade to Oxford Sewage Works? And ultimately, to return to a job in the water industry? Maybe not so great.

If anything, the regulator might need a Chief Financial Engineer, for this is where the real action has taken place. Where has the money gone, why has so much debt been accumulated for delivering so little, and how has so much been extracted?

Just one regulated company and money flowing around this unregulated cash machine - who understands it enough to control it?

We need professional Regulators who understand how to apply perfectly adequate existing law to deter criminals, and that means catching and punishing them when they offend; the people making the big decisions, not fining billpayers for company offending or blaming junior staff who have no choice but to do what they do.

Thames Water has over 180 convictions, but not one intervention of any kind on a board member - it is just bonuses for bosses and the customer funds everything, lawyers, fines, costs, everything.

But even more fundamental than that; what the industry and public really need is to rid the system of the motive to cheat and to game the guaranteed bills of every household and business in England and Wales and to pollute when it is profitable, and that means ending privatisation - the root cause of the motivation and the failure.

The next gimmick? The MOT for Sewage Works? What nonsense is this? Sewage Works already have inspections and companies regularly ignore the findings. An MOT is something that when a vehicle fails, it can't be used until it is fixed. What are they going to do, take London's massive Beckton Sewage Works offline and hire a stand in? Ridiculous hype and that's sums up the 'vision'. Just words to dupe the public.

Dangerous days are ahead. Government is 'getting tough on water regulation' by making sure it keeps the shareholders secure. It is one thing on the label, another inside the tin, just like the review.

We don't need new law to protect the environment - we can see what the government does with the existing law to understand its intent - to protect owners, not the environment.

As long as you have a costed plan to stop this some time, carry on polluting.

So, the biggest part of this proposal is designed to end criminal pollution, but not by putting an end to illegal conduct and toxic discharges, but by making them permissible as long as companies have a plan.

This is how we read it:

Time is running out. Does your MP know enough about this story?

Will your MP vote it in, or vote to protect you?

Join the sewage campaign network to find out how your group or community, no matter how small, can help. https://www.sewagecampaignnetwork.org.uk/resources

Reference links

https://www.windrushwasp.org/single-post/the-watered-down-commission

https://www.opendemocracy.net/en/dark-money-investigations/the-blackrock-letters-inside-labours-close-partnership/

https://www.partnershipsbulletin.com/article/1892614/blackrock-targets-uk-water-sector-contractor-stake