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Water is life, but we’re being bled dry for private profiteering

by Nina Knowles

The average household water bill in England and Wales is to go up by an average of 6% from April, which would leave households with an average bill of £473. The money is promised to fund 10 new reservoirs, to cut leaks and to stop sewage spills. This doesn’t negate the fact that the need for water is non-negotiable for our survival and a prerequisite for public health, not a luxury household expenditure. With more than 2 million households anticipated to require support to pay this increase, how did we get to the point where people won’t be able to afford this essential utility?

Having initially starved England and Wales’s state-owned water and sewerage utilities of much needed public investment, Thatcher’s government privatised these companies in 1989. England and Wales became the only countries in the world to have a fully privatised water and sewage disposal system. Once the 10 public water companies were transferred to the private sector, Thatcher proceeded to write their debts off to zero, as well as providing them some seed money. Over the ensuing three decades, the experiment has worked well for investors, but has been disastrous for consumers and the environment.

The ten private companies in England that are now owned by private equity investors have used financial engineering to boost shareholder returns via complex corporate structures that often involve tax havens. Heavy borrowing has resulted in current debt levels that are to the tune of £14bn for Thames Water alone. The resulting interest payments accrued are then passed on to the customer.

Meanwhile, Thames water paid £37.5 million in dividends last year, despite reporting an 18% rise in pollution incidents between March and September of 2023. In June 2023, £72bn in dividends was paid to shareholders of parent companies since their privatisation, with £53 billion worth of borrowed money used to fund this. This reportedly amounts to nearly half the sum those companies spent on maintaining and improving the country’s pipes and treatment plants between 1991 and 2019. The companies pay little tax and the remuneration of the bosses of English firms has amounted to £58m in pay and benefits over the past five years.  

Directors’ pay dividends and debt service are all financed by bill payers, many of whom face increasing hardship. By 2020, the price of water has risen by 40% in real terms since privatisation and almost a quarter of households had difficulty paying their water bills. An Ofwat survey in May 2022 showed that half of water bill payers expected to struggle to pay a utility bill for that coming year.

Since privatisation, England has seen little investment in its water infrastructure and no building of new water reservoirs. It is reported that some land held by the companies has instead been used for house building, and only one new reservoir is under construction, planned to be in operation by 2029. Because of this chronic underinvestment, more than three billion litres, a fifth of the total daily volume used, are lost to leakage every day. As a result of underinvestment in sewerage, only 16% of English waters and 14% of English rivers meet good ecological status, meaning that England’s waterways are even more inaccessible to communities and hazardous to public health.

Although improvements were reported in the environmental performance of England’s water companies, it was reported that the Environment Agency is failing to regularly audit water companies to check if they are telling the truth about pollution and illegal sewage dumping (The Guardian, 13th September 2023). 2012, 2018, and 2022 saw hosepipe bans in force across many areas of England. Although extreme weather events have contributed to this, more investment on infrastructure could have alleviated the impact of these conditions on customers.

All that thirty-five years of water privatisation has shown is that any attempt at regulating private companies has failed to make them operate in the interests of the public. Customers can’t afford the exorbitant price hikes imposed, and renationalisation must be considered for something so integral to everyday life and public health. In most parts of the world, water is publicly owned, and access to clean drinking water and sanitation is recognised as a human right. If water is a human right, no one should be making a profit for the public consumption of it.

The Workers Party recognises the failures of privatised water companies as part of a wider series of systemic breakdowns in essential aspects of British infrastructure. We also recognise that any utility that is essential to the day-to-day running of households and the country, must be considered for re-nationalisation. There is no interest within the party to prioritise the market or to appease investors; the national interest comes first. The Workers Party will end public-private partnership initiatives in the public sector, to build capacity for a national contracting agency that is integrated with the national economic plan. Such implementation is essential to protect, and fulfil the human right to water and sanitation, as well as to help us protect our environment.

One thought on “Water is life, but we’re being bled dry for private profiteering

  1. Love everything you stand for except……… that you are a political party. is not a political party but an umbrella for truly independent prospective candidates. We believe the individual constituents should dictate Manifesto rather than have a party system attempt to attract support to preconceived policy.
    Could we work together to rid this country of the two-party system and promote independent mp’s?

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