Latest news with #JonCunliffe
Daily Mail
17 hours ago
- Business
- Daily Mail
Labour's drive to build AI data farms 'will send water bills rocketing' by 30 per cent over next five years, report warns
Prime Minister Keir Starmer 's drive to build huge artificial intelligence data centres will help push up water bills by 30 per cent over the next five years, an independent report warns. The banks of computer equipment needed to advance AI models require huge volumes of water to fuel cooling systems. Ministers will also scrap the regulator Ofwat to make way for a new body to try to tame 'Wild West' water firms after the recommendations. But consumers will also pay the price of tackling future sewage spills and renewing crumbling infrastructure. The report's author – Sir Jon Cunliffe, a former deputy governor of the Bank of England – made 88 recommendations to turn around the ailing industry. His Independent Water Commission review tackles the issues of pollution, soaring bills and staggering pay awards and bonuses for failing company bosses. In the report, he warns that bills will have to rise because of a failure to invest in the sector amid a growing population and climate change. He also says that Labour policies including building 1.5 million more homes and more data centres to power AI will put 'pressure' on the system. The report's author – Sir Jon Cunliffe, (pictured) a former deputy governor of the Bank of England – made 88 recommendations to turn around the ailing industry Sir Jon also recommended the introduction of social tariffs to provide support for customers who are unable to pay their bills. He told BBC Radio 4's Today programme yesterday: 'The inescapable fact is that it costs more to produce drinking water and it will cost more to deal with our waste water as we go forward. 'When you look at the pressures on the water system – look at population growth [and] we want to have data centres in this country – they put huge demands on water. 'We have to accept them. But we have to plan for them, we have to decide where the priorities are, and we have to decide how to manage the trade-offs. At the moment, that is just not happening.' The report also said that data centres used by AI companies have a 'high water need'. It cited research from Oxford University that argued 'regional water stress must be considered for each data centre'. In January, Sir Keir launched an 'AI Opportunities Action Plan', which welcomed billions in investment from overseas tech companies to build data centres in the UK. Environment Secretary Steve Reed said yesterday that the Government would scrap the watchdog Ofwat, adding that the water industry is 'broken' and has been allowed to fail under a 'regulatory system that let them get away with it'. 'Our rivers, lakes and seas are polluted with record levels of sewage,' he said. He promised to create a 'single, powerful' regulator, bringing the four bodies responsible for water under its control. He also pledged to cut sewage pollution levels in 2024 by half by 2030 through a series of measures including public and private investment.
Times
18 hours ago
- Politics
- Times
Let the great water clean-up begin
C all this a 'Great Stink' moment? Back in 1858, it proved the cue for Joseph Bazalgette's 1,100 miles of sewers and pumping stations that transformed the health of London. This time all we've got is a 464-page report, overflowing with 88 recommendations, that even its author likened to a 'Russian novel'. All the same, Sir Jon Cunliffe has done us a favour. Maybe no one really needed such a lengthy treatise to spot that when it comes to water regulation the nation has long been up the creek without a paddle — or that scrapping Ofwat is overdue. Yet it's useful to see it spelt out so forensically. And with no truck, either, for the old Labour politics of environment secretary Steve Reed: a chap far too focused on sideshow stuff, such as bans on directors' bonuses, rather than a systemic fix for the problem. Cunliffe, a former Bank of England deputy governor, was clear that, given the job ahead, bills will have to rise and companies be able to pay for 'the best people'.
Telegraph
a day ago
- Business
- Telegraph
As Britain's Leftist puritans enforce rationing, America lives in abundance
Who knew that Britain has a Museum of Water and Steam? No, not another name for our water supply system, but an actual museum, in Brentford, where Sir Jon Cunliffe launched his commission's report on the water industry on Monday morning. The report has been heavily trailed and contains no surprises. It spells the doom of Ofwat, a regulator that has few friends, and deservedly so. It argues for better planning and more rational balancing of economic and environmental needs. And it correctly sets out that, in a privatised system with limited real competition, the next regulator will need to constrain the corporate behaviour of the water companies much more effectively. So far, so conventional. It is unfair to blame that on Sir Jon, who is a more original and less constrained thinker than many in the British establishment. The scope of his recommendations was largely constrained by the initial terms of reference. He wasn't even allowed to look at Scotland for fear of upsetting their so-called 'government', which makes a nonsense of calling this a 'national' report. So the fundamental trade-offs will remain unresolved. The water companies have poured in more than £200 billion of investment since privatisation to deal with our Victorian infrastructure – a genuine museum piece back in the 1980s – but it has not been enough to deal with the problems. Planning issues have meant that we haven't built a major reservoir since 1992, yet the population has increased by 10 million people since then, and is still growing. But the bigger difficulties are political, economic, and cultural. Political and economic – because so many politicians and campaigners demand immediate, magical solutions, and simply will not understand that a nationalised water industry would face the same basic problems. Yes, the water industry has taken out an estimated £80 billion in dividends since privatisation, and in a competitive market that would likely have been a lot less. But investing and building takes time, often quite a long time. And the capital has to come from somewhere. In a privatised industry, that capital comes from the markets, and they need a return. Rightly so: for if Rachel Reeves continues with her plans to force British institutions to invest in British industries, it's a return for you and your pension fund. In a nationalised industry the capital comes directly from you, the taxpayer. But governments never like making people stump up now for something that will only pay off in the future. So investment gets restricted, is badly used, and then prices are held down for political reasons. That's how the state-run water industry got into such a mess by the 1980s. Indeed that's how every nationalised industry gets into a mess in the end. The truth is that if we want a better water system, we are going to have to pay for it, either in bills or in taxes. We can't get around that problem. That's why it's so important to get back to economic growth so we all start getting richer again. And that's why the other problem, the cultural issue, is so important. It is the anti-abundance mindset and it goes well beyond the water industry. This mentality ultimately stems from the 1970s 'Limits to Growth' report, which predicted that natural resources would run out, prices would shoot through the roof, and there would be mass starvation. Reality has shown this to be bunk. Yet it lives on in decision-takers' minds, reinforced by the belief that climate change requires a reduction in our global footprint as human beings and use less of everything. And it's strengthened by a fundamentally elitist, snobbish mindset about economic growth, the view that growth is all about the hoi polloi buying more 'stuff' they don't need, rather than what it is: the advancement of human possibility for all us during our limited time on this planet. Look hard – actually you don't need to look hard – and you see it everywhere. Consider the disdain for 'cheap food' and the moral panic about UPFs, surely a fabricated concept, and one whose principal benefit is psychological, allowing well-off politicians and campaigners to play Lady Bountiful telling ordinary voters how to eat. Think of the sneering at big cars, or worse still people with more than one car, the suburban lifestyle, houses with gardens instead of egg-box flats, package holidays instead of leisurely eco-travel. Contemplate all the tedious lifestyle preaching, the hectoring of supermarkets about packaging, the determination to build houses with tiny windows and small rooms and then to ban air conditioning as it's too damaging to the environment. This world view is inimical to economic growth and to human prosperity and well-being. The industrial revolution gave us the huge benefits of more energy and more clean water (the two are of course connected). But we have got ourselves into a mentality where we think using less of these things is good and where we ignore the connection between low energy use and low economic growth. In Britain we use nearly 30 per cent less energy and 25 per cent less electricity overall than in 2000 – despite the increase in population. The Americans use the same amount of energy as then and 15 per cent more electricity. That's a big part of the reason why they still have economic growth and we do not. And similarly on water. Each American uses about 300 litres of water a day. Each Brit uses about 140 litres, and the Government wants to get that figure down to 105. Hence the proposals in the Water Commission report for compulsory water metering, water reuse, and social tariffs. Better get used not just to hosepipe bans, but showers even feebler than now, and dishwashers that are beautifully eco-friendly but leave your plates dirty. Without an abundance mindset, you don't have any choice but to ration, either by price or by queue. But Britain is a wet country. We are surrounded by water which we could desalinate if we didn't restrict energy production. In Western Europe, only mountainous Norway and Switzerland get more rain. We could have enough water for everyone, if we built and invested accordingly. That should be our target. If we need to manage demand while we are getting there, that is one thing. But to tell us we will never have enough water, and it will cost ever more? I say no to that.
The Guardian
a day ago
- Business
- The Guardian
Abolishing Ofwat is fine but not enough: teach water bosses that failure has consequences
In a bone dry summer, every drop of water counts. So, even though the rain is finally falling again now, it's still hard to take it for granted, or to ignore the way that everything in the countryside still feels unnervingly out of rhythm: earth too cracked, grass too bleached, wheat harvest being brought in too early, rivers too low – and, knowing what Thames Water has been pumping into them, water quite possibly too dirty to cool off in. In May, the company was fined £122.7m for the combined sins of sewage dumping and continuing to pay shareholder dividends despite its environmental failings. It responded by protesting that it might go bust if actually held accountable for its actions, a sentence that sums up everything people find infuriating about the water industry. Yet its resentful customers have no choice but to keep paying bills that are expected to rise by a third over the next five years – though Thames Water, inevitably, asked to be allowed to charge more – while wondering how we ever let a commodity this precious become so badly managed, heading into a volatile new era of summer drought and winter flood. Rivers, Jon Cunliffe notes in his newly published review of what a new Labour government should do about the water industry, are part of a country's national identity. There's a romance and a history to be preserved here, not just a life-giving water supply to be extracted or wildlife habitats to be protected. Being a neutral civil servant, what he doesn't explicitly add is that lately they have also come to symbolise corporate failure and decline of the public realm, but that too is part of the picture. Few will disagree with Cunliffe's verdict that the current regulator, Ofwat, isn't up to negotiating the complex trade-offs involved here, and that there should be a new watchdog, bringing together various powers currently scattered across Whitehall, with the ability to take control of failing water companies if needed. His ideas for increasing accountability, curbing excessive dividends and creating a new social tariff for those who can't afford to pay is welcome too. (Bills were kept too low for too long, the review concludes, meaning that when the inevitable hike came it was painfully sharp.) But that's the easy bit, compared with facing up to the consequences of chronic underinvestment by an industry that has in parts seemed quick to take the profits and slower to take responsibility. There will be outrage on the left that Cunliffe doesn't advocate nationalisation, though politically that idea was off the table before he started. (Labour said before the election that it wasn't keen to take water back into public ownership, and nothing about the fiscal hole in which it has since found itself has made the idea of spending billions on doing so more appealing: Cunliffe's terms of reference were set accordingly.) The review argues that ownership models are anyway something of a red herring – water is nationalised in Scotland but bathing water quality isn't much better there than it is south of the border, and while Welsh Water's not-for-profit model could be viable for some English companies, even that isn't necessarily a magic bullet. All of which may well be true, but might sound more convincing had ministers given him free rein to consider all the options equally. As it is, it's hardly his fault that this plan – which would still see water bills rising steeply to fund the investment in creaking infrastructure that everyone accepts is necessary – is the answer of the Treasury official he used to be, rather than of a politician. Where's the moral hazard, the price any private business should be forced to pay for failure, if in the end their customers just get stuck with the tab? It's not our fault if companies who were granted a monopoly back in 1989 over the supply of something humans literally can't live without still managed somehow to make a commercial hash of it. No wonder the water minister, Emma Hardy, will take the summer to decide exactly which of Cunliffe's recommendations Labour plans to accept. The dilemma this government finds itself in over water is, of course, not unique. It is part of a common thread now linking everything from welfare reform and the still unresolved problem of funding social care, to the momentous decisions on tax now facing Rachel Reeves in her autumn budget; that these are all expensive and deep-seated problems this government's predecessors repeatedly dodged or kicked down the road. And, although Labour's commitment to actually facing reality is admirable, it turns out there were good reasons everyone else chose to bravely run away. Years of ducking and diving have only magnified those problems, to the point where selling the kind of sacrifices now required to a reluctant public is almost impossible. Getting the future governance of the industry right is crucial, of course, but that's not the end of it. Thames Water should be allowed to fail, on the grounds that it has done nothing to deserve a taxpayer bailout, and if its lenders have to take a hit, well, them's the risks. Parliament should keep digging, investigating the historic failures of oversight that allowed us to get into this mess. But, somehow, ministers need to find a broader way of conveying that failure has consequences, and not just for the taxpayer. A harder rain needs to fall, not just into rapidly shrinking reservoirs, but on to some of those responsible for managing them. Gaby Hinsliff is a Guardian columnist
Bloomberg
a day ago
- Business
- Bloomberg
Allegra Stratton: Can we Clean up the UK's Great Stink?
If you're anywhere near the Great British seaside right now – as I was at breakfast this morning when a thunderstorm turned the morning sky over the Atlantic a dark inky blue – then the 464-page report out today on the future of the UK's water industry is a mixed bag. There are plenty of good bits — it's positive that Jon Cunliffe's review recommends stricter oversight of water company ownership. The proposed new regulator could get the power to block changes in the running of water companies if they are not seen to be prioritizing the long-term interests of us all.
