Bernard Ginns: Time to let Yorkshire Water reach out of the region

The utility firm's new chief executive, Richard Flint, told this newspaper that Yorkshire Water wants to see a relaxation of the regulations surrounding mergers and acquisitions in this highly leveraged sector.

He believes it will benefit both customers and the industry as a whole, saying: "If the regulatory conditions were right, we would look very carefully and seriously at potential acquisition opportunities within the sector."

In a clear sign of his ambitions for the business, Mr Flint added: "Yorkshire Water wants to play a leading part in moving the industry forward. When you have a track record of delivery like Yorkshire Water has, we need to take our seat at that table."

Water companies have combined debts of 32bn, a figure which will rise to 59bn after a five-year investment programme to maintain and improve the UK's water infrastructure.

Coupled with Ofwat's capping of bills, the sector will be coming under increasing pressure to make ends meet. Indeed, Mr Flint has raised questions over its future sustainability.

He believes there are economies of scale to be had in the industry, where well-run companies like Yorkshire Water can take over poor performers for the good of all.

Yorkshire Water scores highly in regulatory assessments and prides itself on its top-ranking efficiency levels.

It would make perfect sense for this company to reach into other regions and share its good working practices.

The next government and regulator should take note of what Yorkshire Water is saying and act in the best interests of consumers.

A COUPLE of weeks ago, I interviewed a leading European industrialist about his decision to invest in a manufacturing subsidiary in South Yorkshire.

Jan Aalberts, the 70-year-old founder and chief executive of Aalberts Industries, is backing a 12m investment programme at Pegler Yorkshire, which makes fittings, taps and valves for customers in the UK and abroad.

He didn't take the decision lightly and had to be persuaded of its merits by the UK management team, led by Mike Saunders.

Mr Aalberts' comments stuck in my mind. They concerned the future of manufacturing in the UK. He told me: "Labour is going to be minimalised by doing the right investments where you have more unmanned production."

His is an opinion you should probably take note of. Mr Aalberts started his company in 1975 with four staff. Today Aalberts Industries is a global engineering giant with more than 10,000 staff and a turnover of 1.4 billion euros.

With the investment in modern automated facilities, Pegler Yorkshire has a comparable cost base with rivals in the Far East. That means it can compete with the Chinese on a level playing field.

While this is not good news for UK workers with manual skills, the alternative is far worse, as reader GC Wilson of Harrogate pointed out last week.

The failure to invest in automation and "the failure of management and trade unions to see the consequences of their head-in-the-sand policies" led to a sharp decline in UK manufacturing, he said.

Mr Wilson worked in automation in the 1980s. This, he said, was a time "when British industry was just beginning to wake up to the fact that the world did not owe them a living".

He said he was initially troubled by the consequences of his efforts. "I thought I was in the business of putting people out of work," he added.

"However the alternative, no work at all, was even harder to contemplate."

As Mr Aalberts puts it, "you cannot do without people". But if Britain wants to be able to compete with China, manufacturers must find the money, invest in the latest machinery and make sure they have the right kind of people in place. (By this I mean skilled engineers.)

In a perfect world, British companies would be making the machines as well.