Calls to take water firms into public ownership have intensified
England’s private water firms are under fire once again today, after reports that they could be set to raise bills by as much as 40%. The touted rise comes as the water industry faces significant pressure to tackle the scandal of sewage being pumped into waterways.
Private companies currently operate thousands of sewer overflows which are used to discharge raw sewage into Britain’s rivers and seas. Last year, private water companies released raw sewage into rivers and seas in England for more than 1.75 million hours, with an average of 825 sewage spills per day.
Critics of the water companies argue that they have prioritised providing returns for shareholders, rather than investment in infrastructure that would have tackled the sewage crisis. Since privatisation in 1989, water companies have paid out more than £70 billion to shareholders.
Anti-privatisation campaign group We Own It has branded reports of major bill rises ‘outrageous’, and has called for water to be taken into public ownership. The group’s director Cat Hobbs told Left Foot Forward: “It’s outrageous. We’ve seen decades of underinvestment in our water system, and now we’re expected to foot the bill for infrastructure improvements.
“What have private companies been doing with their enormous profits for the last 34 years? They’ve paid out £72bn in dividends to shareholders. That’s money that could have been reinvested into our infrastructure to prevent the mess we’re in now. Publicly-owned Scottish water spends £72 more per household per year on tackling infrastructure problems.
“Enough profiteering. If we want to see decisive action to tackle the sewage crisis without massive increases in bills, we need government to bring our water system into public ownership, where it can work for people, not profit.”
News of eye-watering bill rises comes as England’s largest water firm Thames Water is reportedly on the brink of collapse. Thames Water has been thrown into crisis in the last 24 hours following the resignation of its CEO Sarah Bentley and revelations that the company is in dire straits as a result of its huge debt mountain which stands at a staggering £14bn.
Government ministers and industry regulator Ofwat are said to be holding discussions about potentially taking Thames Water temporarily into public ownership.
However, campaign groups and trade unions have said that Thames Water isn’t the only private water firm at risk, and that the whole sector should be taken into public hands.
Gary Carter, national officer for the GMB union, said: “The potential collapse of Thames Water is indicative of the failure of the water industry’s ownership model. The chickens are coming home to roost.”
Carter continued: “Forty years since privatisation and we’ve seen almost no investment in infrastructure and the workforce while shareholders and fat cats drain fortunes from the industry.
“Ministers and Ofwat have been asleep at the wheel while executive pay at Thames ballooned, and the company’s debt to asset ratio rose to a totally unsustainable 10:1. This vital public resource has been bled dry by private equity parasites – with interest rates skyrocketing the whole thing is a house of cards waiting to collapse.
“It’s crystal clear the privatisation experiment has been a devastating failure. We need to get our water industry back into public hands now.”
Chris Jarvis is head of strategy and development at Left Foot Forward