Callum Joyce, Socialist Party southern and south east organiser
The spectre of a government takeover is looming over Thames Water once again. The Socialist has carried numerous articles following the scandal-ridden history of this privatised utility with its infamous, but predictable, record of dumping sewage into our waters and hiking bills year on year – all while paying out hefty bonuses to its managers and executives.
Private equity companies have spent decades maximising their profits while our bills have gone up and vital infrastructure spending has been neglected; Thames Water’s debt levels now stand at over £17 billion. The unsustainable cost of interest payments, along with having to pay fines for dumping sewage, have repeatedly brought the company to the brink of financial collapse. In each previous case this was only averted by a last-minute injection of investment. Now, the issue has returned after a deal to sell the utility to private investment fund KKR collapsed at the last minute.
Given that Thames Water provides a vital service to 16 million people, the government will be compelled to intervene if further private investment cannot be secured and has announced that it has contingency plans in place to do so. But those who are hoping this may mean the renationalisation of the utility will be again sorely disappointed by this Labour government.
The proposals put together would place Thames Water into a Special Administration Regime (SAR) where a private consultancy firm is brought in to take over the day-to-day management of the company. But the environment secretary, Steve Reed has said that he still believes in the possibility of a ‘market-led solution’ to the company’s problems. This means that the government would only aim to use the takeover as a temporary measure, restructuring the debts of the company to make it more appealing to future investors. Working-class people, not the bosses who ran down the company, would undoubtedly be expected to pay the price. The government would then try to flog it back to the same private interests that ruined the service in the first place! CKI, another private investment firm, has indicated that it could step in to take over the company in such a situation, no doubt seeing the potential to make a profit once the government has sorted out the company’s debts. Increases to our already eye-watering bills has been raised as a way to pay for the costs of temporary government intervention before it has even happened.
Actually nationalise it
This sham measure is no replacement for what is actually needed – genuine nationalisation without a penny of compensation paid to the greedy shareholders who have created this mess. Pensions or other savings invested in the company belonging to ordinary people should be compensated, but this would cost only a fraction of the huge profits exploited from Thames Water over decades.
A nationalised Thames Water run by government bureaucrats or private consultants would not deliver the changes we need – to reduce pollution and bring down our bills. To do this, Thames Water and the whole water industry would need to be run democratically by the working class. On that basis, it would be possible to properly and efficiently plan the running of the company. Instead of profits spirited away, resources could be invested back into the maintenance and expansion of the pipes, reservoirs, sewage treatment plants and more.
And why stop at Thames Water? Private profit should be kicked out of the entire water industry. With democratic planning, with the expertise of workers in the industry and driven by the needs of ordinary people – not profit-seeking vultures – we could lower bills and protect the jobs and pay of its workers.
