Wednesday, 13 October 2021

Who actually owns the UK's water supply?


A significant majority of British people believe that the water supply is so vital that it should be run as a not-for-profit public service, but the Westminster establishment consensus is that in England it should continue to be run as a vast profit extraction scheme operated mainly by foreign governments and overseas corporations.

In this article I'm going to give a basic overview of who actually owns the UK's water supplies.

Scotland, Wales, and Northern Ireland

Scottish Water and Northern Ireland Water are both government owned statutory companies, meaning any profits go straight back into public finances.

Welsh Water is owned by Glas Cymru, which is a not-for-profit company. It has no shareholders, and retains any profits for the benefit of Welsh water customers.

So far so good. Two different models of how water companies can be operated for the benefit of the people, rather than for profit-extraction purposes. 

England

England's water supply is an absolute mess. It's broken up into multiple different regional monopolies, operated by various different private entities.

Research by the University of Grenwich found that privatisation of the water supply in 1989 has cost customers in England £2.3 billion per year more than if it had remained under not-for-profit public ownership.

So who are the owners of the private water companies that are raking in all of this profit at English people's expense?

Anglian Water (£1.4 billion)

Anglian Water supplies 2.6 million homes with water, and compared to a lot of others its ownership structure is fairly simple.

Its parent company is AWG, which a subsidiary of the Osprey Group, which is owned by the following:

Canada Pension Plan Investment Group 32.9% (wholly owned by the Canadian government)
IFM 19.8% (Australian investment fund)
Infinity Investments 16.7% (Wholly owned by the UAE government)
First Sentier 15.6% (Australian investment fund)
Camulodunum Investments 15% (UK investment manager)

So one of England's major water suppliers is 49.6% owned by foreign governments, and 30.6% owned by foreign private investors. Leaving just 15% that's run by a private UK-based investment manager.

Northumbrian Water (£820 million)

Northumbrian water supplies 2.7 million homes with water. Its parent company is NWG, which is wholly owned by the Hong Kong based firm Cheung Kong Infrastructure Holdings.

Cheung Kong Infrastructure Holdings is mainly owned by CK Hutchinson Holdings, which is run by the billionaire Li dynasty. Additionally there are number of other investment funds involved. Some of them are names which will be very familiar by the end of this article.

CK Hutchinson Holdings 72% (Hong Kong investment fund)
Conyers, Dill and Pearman 5% (Bermuda based offshore law firm)
BlackRock 1.1% (US based investment fund)

Other notable shareholders include: Lazard Asset Management (US investment fund), Vanguard Group (US investment fund), Norges Bank (100% Norwegian government owned bank).

United Utilities (£1.86 billion)

What used to be North West Water was merged with the North West Electricity Board to create United Utilities, which supplies water to 7.3 million people. The CEO took home £2.94 million in 2020.

United Utilities is a Public Limited Company (PLC) with a number of institutional shareholders. These are the owners with stakes above 1% (as of October 2021)

BlackRock 8.6%  (US based investment fund)
Lazard Asset Management 7.2% (US investment fund)
Legal and General Investment Management 4.1% (UK investment fund)
Vanguard Group 4.0% (US investment fund)
Norges Bank 2.9% (100% Norwegian government owned bank)
Impax Asset management 2.5% (UK investment fund - biggest shareholder French bank BNP Paribas)
Magellan Asset Management 2.4% (Australian investment fund)
Pictet Asset Management 2.3% (Swiss investment fund)
State Street Global Advisers 2.2% (US investment fund)
M&G Investment Management 2.0% (UK investment fund)
Nuance Investments 2.0% (US investment fund)
Amundi Asset management 1.9% (French investment fund, mainly owned by French bank Crédit Agricole)
Invesco Ltd 1.7% (US investment fund)
Columbia Management Investment Advisers 1.6% (US investment fund - a division of Amerprise, which is based in the US tax haven of Delaware)
Maple-Brown Abbott Limited 1.3% (Australian investment fund)
Ignis Investment Services 1.3% (UK investment fund)
Nordea Investment Management 1.2% (Finnish investment fund)
Aviva Investors Global Services Limited 1.1% (Investment arm of UK insurance group Aviva)
abrdn plc 1.1% (UK investment fund)
Northern Trust Global Investments 1.1% (US investment fund)
HBOS Investment Fund 1.1% (Subsidiary of the UK-based Lloyds banking Group)
UBS Asset Management 1.0% (Investment arm of the giant Swiss bank UBS)

Severn Trent Water (£1.84 billion)

Severn Trent Water supplies 4.5 million households and businesses. Their CEO Liv Garfield took home a whopping £2.807 million despite the company being fined £800,000 for leaking millions of litres of raw sewage into a Shropshire stream in the same year.

It's another Public Limited Company (PLC) with a number of institutional shareholders. These are the owners with stakes above 1% (as of October 2021)

BlackRock 8.1%  (US based investment fund)
Lazard Asset Management 7.4% (US investment fund)
Qatar Investment Authority 4.6% (100% owned by the Qatari government)
Vanguard Group 3.8% (US investment fund)
Legal and General Investment Management 3.6% (UK investment fund)
Aviva Investors Global Services Limited 3.0% (Investment arm of UK insurance group Aviva)
Impax Asset management 2.7% (UK investment fund - biggest shareholder French bank BNP Paribas)
Maple-Brown Abbott Limited 2.5% (Australian investment fund)
State Street Global Advisers 2.3% (US investment fund)
Norges Bank 2.1% (100% Norwegian government owned bank)
Royal London Asset Management Limited 1.7% (UK investment fund)
Amundi Asset management 1.7% (French investment fund, mainly owned by French bank Crédit Agricole)
Invesco Ltd 1.5% (US investment fund)
First Sentier 1.4% (Australian investment fund)
RREEF America LLC 1.3% (US investment fund)
Fidelity International 1.1% (Bermuda-based investment fund)
Janus Henderson Group 1.1% (UK investment fund)

Wessex Water (£550 million)

Wessex Water supplies 1.3 million homes with water.

It's a 100% owned subsidiary of the Malaysian conglomerate YTL Corporation, run by the Malaysian billionaire Yeoh Tiong Lay, and partially owned by the Malaysian government's pension fund.

Southern Water (£830 million)

Southern Water supplies 2.26 million customers. In 2020 they were fined £90 million for dumping untreated sewage into rivers and coastal waters on over 6,900 occasions. In the same year as this record-breaking fine they paid their CEO over £1 million in salary and bonuses.

Southern Water is a Limited Company owned through Greensands Holdings Limited which is based in the tax haven of Jersey, with the following major shareholders.

JP Morgan Asset Management 40% (Investment arm of the US bank JP Morgan)
UBS Asset Management 22% (Investment arm of the giant Swiss bank UBS)
Hermes Investment Management 21% (UK investment fund)
Whitehelm Capital 8% (Australian investment fund)

The Australian investment fund Macquairie has recently bought up a £1 billion stake in Southern Water. They're most famous for asset stripping Thames Water, paying virtually no corporation tax, lavishing £billions in dividends on its shareholders, lumbering it with huge debts, and flogging it off just months before it was prosecuted by the Environment Agency for pollution.

Thames Water (£2.05 billion)

Thames Water supplies 15 million customers, which accounts for 27% of the UK population. They were fined  £2.3 million in March 2021 for pollution, hit with another pollution fine of £4 million in May 2021, and paid an £11 million fine for overcharging customers in July 2021.

Britain's biggest water company is also its most opaquely structured, with strings of similarly named subsidiaries and shell companies falling under the ultimate ownership of Kemble Water Holdings Limited, which is apparently based on a Reading industrial estate.

It's pretty tricky to track down the owners of this £2 billion company, but they include the following major investors:

Church Water Investments Limited 13.9% (CWIL is owned by L3 Investment Holdings, which is owned by L3 Investment Holdco Ltd, which is owned by the UK-based Universities Superannuation Fund - Why they need such an opaque structure to hide their investment in privatised water infrastructure is anybody's guess)
Omers Farmoor Holdings 12.6% (Dutch investment fund)
Infinity Investments 12.6% (Wholly owned by the UAE government)
Wren House Infrastructure Investments 11.1% (A front company for the government of Kuwait)
Trustees of the BT Pension scheme 11.0% (Pension fund of UK telecoms giant BT)
Cicero Investment Corp 11.0% (US-based private equity fund)
QIC Infrastructure Management 6.8% (Australian government-owned investment fund)
Aquila Sonnet Limited Partnership 6.3% (A single purpose investment vehicle, designed to obscure the identities of the six investors)

South West Water (£500 million)

South West Water supplies 1.7 million customers. It's a wholly-owned subsidiary of Pennon Group, which announced pre-tax profits of £157 million in 2021, and they're sitting on cash reserves of over £3 billion. Instead of using this cash mountain to make improvements and stop repeatedly dumping raw sewage into waterways, they're using it to buy up other water companies like Bristol Water.

The CEO of Pennon Group Susan Davy took home £1.724 million in 2020.

These are the main shareholders in Pennon Group (as of October 2021):

Lazard Asset Management 10.0% (US investment fund)
Impax Asset management 5.8% (UK investment fund - biggest shareholder French bank BNP Paribas)
BlackRock 5.2%  (US based investment fund)
Vanguard Group 4.3% (US investment fund)
Norges Bank 4.1% (100% Norwegian government owned bank)
Pictet Asset Management 3.9% (Swiss investment fund)
Legal and General Investment Management 3.1% (UK investment fund)
Amundi Asset management 2.9% (French investment fund, mainly owned by French bank Crédit Agricole)
Invesco Ltd 2.1% (US investment fund)
Royal London Asset Management Limited 2.0% (UK investment fund)
Fidelity International 2.0% (Bermuda-based investment fund)
Columbia Management Investment Advisers 1.7% (US investment fund - a division of Amerprise, which is based in the US tax haven of Delaware)
Aviva Investors Global Services Limited 1.5% (Investment arm of UK insurance group Aviva)
Charles Stanley & Co. Ltd 1.3% (UK investment fund)
HSBC Global Asset Management 1.0% (Investment arm of the British bank HSBC)

Yorkshire Water (£980 million)

Yorkshire Water supplies 4.5 million people and over 100,000 businesses. It's another one with an extremely opaque ownership structure.

Yorkshire Water is run as a wholly-owned subsidiary of Kelda Group. Kelda Group is made up of an intricate network of companies, which includes Kelda Eurobond (which makes vast losses meaning it has to pay no taxes in the UK), before you finally end up at the overall parent company Kelda Holdings, which is based in the tax haven of Jersey.

Kelda Holdings is owned by the following (as of October 2020):

GIC 33.6% (The sovereign wealth fund of the Singapore government)
Gateway HK Water (I and II) + Gateway Infrastructure 30.3% (Three recently formed Hong Kong based private companies, very difficult to find who the ultimate owners are)
Wharfedale Hong Kong Limited 23.4% (Another recently formed Hong Kong based private company)
SAS Trustee Corporation 12.8% (Australian state-owned pension fund)

Conclusion

The people of Scotland, Wales, and Northern Ireland benefit from not-for-profit public ownership.

The water supply of England is used for profit extraction purposes by the following:

Governments: Australia, Canada, Kuwait, Norway, Malaysia, Qatar, Singapore, UAE

Private companies based in: Australia, Bermuda, Finland, France, Hong Kong, Jersey, Malaysia, Netherlands, Switzerland, UK, US

You'd have to be beyond delusional to think that this chaotic and opaque system of ownership makes any kind of rational sense for English water consumers.

The only reason it would be arranged like this is in order for private companies and foreign governments to extract as much profit as possible out of England's water customers.

How on earth is it justifiable that the governments of eight other nations can hold direct stakes in England's water supply, while the UK government itself insists that it's unfit and improper for the nation to own and run its own water supply?

What kind of person believes other governments are fit to run England's water supply, but their own government isn't?

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3 comments:

Anonymous said...

The situation in Scotland is that domestic water is State owned. Commercial water is supplied by private companies at a rate which does not include an element to maintain pipework or infrastructure which it shares with domestic customers, who pay the charges for maintenance. As usual nationalise the costs and privatise the profits.

Mr. Magoo said...

Why the hell should we have to pay for clean water? Access to clean water is a human right, it shouldn't be a commodity to be sold for profit. They would charge us for breathing air if they could! Can you imagine going to jail because you can't pay your air bill?

Also, I still don't understand how enterprises are 'for profit' if owned by foreign governments, but 'not for profit' if owned by this government.



Mr. Magoo said...

Not a lot of people know what real socialism means. So, below is the objective of the World Socialist Movement along with details of what it means exactly:

"OBJECTIVE: The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community."

"EXPLANATION: What is meant by 'a system of society'?

"The world is a “global village”. Each region may have its own particular and distinct customs, but they are part of a greater system of society that is world-wide. This system of society is capitalism and every region and nation operates within this system of society in one way or another. Socialism is not a cooperative island in the middle of capitalism, but a global system of society that will replace capitalism.

"THE MEANS AND INSTRUMENTS FOR PRODUCING AND DISTRIBUTING WEALTH?

"This includes the forests, mines, and oceans from which natural wealth is extracted, the factories in which this natural wealth is processed, and the distribution of that wealth via transportation networks (such as roads and truck lines) and distribution centres (such as grocery and department stores). It does not include your personal belongings such as your toothbrush or clothing, or the family heirloom.

"COMMON OWNERSHIP?

"Common ownership means that society as a whole owns the means and instruments for distributing wealth. It also implies the democratic control of the means and instruments for producing and distributing wealth, for if everyone owns, then everyone must have equal right to control the means and instruments for producing and distributing wealth.

"Common ownership is not state ownership. State ownership is merely the ownership by the capitalist class as a whole, instead of by individual capitalists, and the government then runs the state enterprises to serve the capitalist class. In the self-proclaimed “communist” states the state enterprises serve those who control the party/state apparatus. The working class does not own or control. It produces for a privileged minority."

Source: https://www.worldsocialism.org/spgb/our-object-and-declaration-principles/