The Impact of the Regulator on Pay and Conditions of Members in the Water Industry

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2013 Water, Environment & Transport Service Group
25 February 2013

Conference notes the critical role that Ofwat play in regulating the privatised water industry. It also notes that despite the role of the regulator, profits within the utility businesses have increased to record levels making the owners and key executives very wealthy.

Despite the increased profits, members have seen their pay and conditions attacked over a number of years. This is most evident in the pensions that members in the industry receive. Most members in the industry will have in the past received a defined benefit ‘db’ scheme as standard giving a degree of certainty for them when they retire. Today very few ‘db’ schemes in the industry remain open for new starters and some are now closed altogether. This is a deplorable situation which will lead to considerable insecurity for members when they approach retirement.

The difference between a defined benefit scheme and defined contribution scheme is immense. Companies make huge savings when they switch from a db scheme to a dc scheme. This saving is actual money not paid to members and in reality reflects a huge wage cuts for thousands.

This situation we note is being encouraged by the regulators who see attacking pension provision and wider pay and conditions as quick wins to make savings and drive down costs to consumers. This is clearly the preferred approach rather than tackling the profiteering by the owners. This green light to the water industry has not delivered any real gain to consumers as costs to them have continued to increase.

This conference calls on the Service Group Executive to:

i) Formally raise these concerns with Ofwat in a robust manner. It should be made clear to them that UNISON members are not the reason why water prices have risen.

ii) Raise this issue with the Secretary of State for the Environment to ensure our concerns about the regulators actions are registered.

iii) Work with Labour Link and other appropriate channels within UNISON to raise this issue with opposition representatives to ensure our concerns about the regulators actions are registered.

iv) Co-ordinate our concerns with other Trade Unions in the water sector to ensure that any response is as effective as it can be.