Privatisation of water has been a disaster, spewing money for shareholders and sewage into rivers. Utilities must be renationalised, argues Terina Hine

Having dumped 72 billion litres of sewage into rivers since 2020, with sewage flooding into London’s rivers last year for 10,000 hours – an increase by 3,000 hours from the previous year – Thames Water has proved beyond doubt that the privatisation of basic necessities stinks. It stank when Margaret Thatcher privatised the water utilities in 1989, and it stinks today. 

Thames Water is Britain’s biggest water company. It is supposed to provide one in four people in the UK with water and sewage facilities. It has clearly failed.

Last weekend, following the annual Oxford and Cambridge boat race, the appalling level of sewage in our waterways hit the headlines once more. The River Thames has been the river most affected by the company’s dumping policy. So much so that members of the rowing team reported feeling sick and the Oxford captain commented to the media that the race would have been ‘a lot nicer if there wasn’t as much poo in the water.’ High levels of E. coli, which can cause severe diarrhoea, kidney failure and sepsis, were recorded along the stretch where the boat race took place, forcing the organisers of the race to issue additional safety guidance. The River Action UK campaign group warned the rowers to avoid contact with river water during the race.

Then on Friday, following a week of shitty headlines, Thames Water’s parent company defaulted on its debt. So begins a restructuring of the largest water utility in Britain and the possibility that, yet again, the taxpayer will be forced to bailout a failed private company.

The expected collapse of Thames’ parent company, Kemble, follows the refusal of its nine current shareholders to provide the emergency funding needed to service its debt, notwithstanding that Thames Water shareholders have spent the last thirty years raking in massive profits. The refusal was blamed on the regulator, Ofwat, who insisted that the company clean up its act and invest in its water delivery and sewage system. Completely unacceptable. The shareholders also accused the regulator of imposing unacceptably severe fines.

But that wasn’t all. Thames Water also wanted to hike up prices by a whopping 56% by 2030 to help pay its debts and fund investment. Bills have already risen by 12% this year, yet Thames Water CEO, Chris Weston, with a pay package worth £2.3 million, proposed without a shred of shame an increase in bills that even Michael Gove could not support. Weston also suggested, live on Radio 4, that Thames Water was operating normally, even though there were reports of raw sewage flowing down streets into rivers, leading listeners to question what abnormal would be? Clean water?

Much of the Britain’s essential infrastructure has been bought by large institutional investors with huge portfolios worth billions. Many of them are offshore. Water is no exception. More than 70% of English water is now under foreign ownership – both private and state institutions – making the industry particularly difficult to regulate as its investors are particularly difficult to hold to account. Scotland and Northern Ireland have both maintained state ownership of their water and sewage systems. In this particular utility, England is an outlier, one of a very small number of countries where water is in the hands of private companies. 

And it’s a very profitable business. Since 1989, water bills have risen by 360%. That’s more than double the rate of inflation. According to the Financial Times, since privatisation, the water industry has paid more than £72bn in dividends while accumulating £60bn worth of debt. 

In 2018, writing about the UK water industry, Karol Yearwood called it ‘an ATM for investors’. Huge payouts and no-to-little investment. Instead, Thames Water pumps sewage into our rivers and chooses to blame ‘excessive rain’ for the stench.

Water is a basic necessity and a natural monopoly; the argument for it being in private hands is as bad as the effluent that flows in the Thames. Water must be brought back into public ownership.