Even Rupert Murdoch outlet the Times is calling for the Labour government to place Thames Water under special administration:
Few companies have a worse record of greed, myopia, incompetence and complacency than Thames Water, the privatised utility now drowning in £18 billion of debt and recklessly polluting the nation’s rivers and countryside with raw sewage. Few companies better deserve the public opprobrium directed at this self-serving company that chooses to pay its executives bonuses and its shareholders undeserved dividends rather than remedy its massive shortcomings.
Thames Water: full nationalisation now
The amusing thing is that the newspaper is describing privatised utilities as a whole (if not the wider free market system), not just Thames Water. Lack of investment from privatised electricity companies has resulted in millions of litres of oil (which insulates old cables) spilling into the environment. Meanwhile, we are paying gas companies billions just for being ‘on standby’. And the nature of most companies under unregulated capitalism is “self-serving”.
Onto Thames Water, special administration would be temporary nationalisation. The Times stops short of calling for permanent public ownership:
The immediate answer, according to most angry consumers, is that it should be nationalised. It is the wrong answer. Not only would that burden the government with a huge debt it cannot afford in these difficult times; it would mean that the state would have to shoulder losses which should rightly be borne by lenders who have supported Thames Water’s financial irresponsibility over the years.
But experts say that’s a flawed argument. The cost of nationalisation would be zero (or negative) according to Ewan McGaughey, professor of law at King’s College London. And a University of Greenwich study for We Own It found that there is a “privatisation tax” of 35% on our water bills. In other words, we’re spending over one-third more than we need to every time we turn on the taps – because of privatisation. The research found that the UK public would save £5 billion per year on water bills if the government brought water into public ownership.
On top of that, the Times’ claim that the government would pay off all of Thames Water’s debt if nationalised isn’t true. Even if the government took on the company’s debt via public ownership, JP Morgan has estimated that 55% of it would be cut. And the remaining private debt would be replaced with public debt, which has cheaper interest rates. Consumers are already paying off Thames Water debt through higher bills. Via nationalisation we would be saving billions and in sur plus within a few years, at the very least.
Huge profits
The Times admits that:
Between 1989, when it was privatised free of any debt, and 2024 the water industry — including other companies with a record almost as disgraceful as that of Thames Water — took on £64 billion of debt while at the same time paying out £78 billion in dividends.
So the paper’s argument against privatisation doesn’t hold up.
But the Labour government is itself adamantly against public ownership of water. Keir Starmer’s government ordered a review of the water industry in October that was supposed to be the ‘largest since privatisation’. Yet it prevented the review – undertaken by Jon Cunliffe, a former deputy governor of the Bank of England – from even considering public ownership as a solution.
Firm eyeing buying Thames Water
Hong Kong company CK Infrastructure Holdings is reportedly a leading contender to take over Thames Water after it’s placed under special administration. But campaigners are pointing out that it would be a “profound betrayal of the public” for the government to sell off the company after getting rid of its debts.
River Action’s head of campaigns, Amy Fairman, said:
This crisis is a chance to rebuild [Thames] for public benefit, not private profit. Labour campaigned hard during last year’s election on promises to get a grip on the water crisis and act tough on failing water companies. This is a chance to chart a new course, not repeat the mistakes of the past by selling to overseas buyers eyeing a bargain.
CK Hutchison Group owns the vast majority of CK Infrastructure Holdings. The giant also owns UK Power Networks, which owns the electricity distribution network across London, the south east and the east of England. Why would we sell off more our key infrastructure to this company, or any other? We need our utilities everyday, so renting them rather than owning them is an absolute scam.
Featured image via the Canary
