Original article by Ana Vračar republished from peoples dispatch under a Creative Commons Attribution-ShareAlike 4.0 (CC BY-SA) license.

Demands for renationalization of water services in England grows as private London water supplier requests bailout

Social justice organizations in Britain are urging judges to reject a bailout request from Thames Water, one of the country’s largest water providers, serving some 16 million people in the greater London area. Campaigners argue that approving the bailout of the private utility provider would allow Thames Water to continue its mismanagement while forcing consumers to shoulder the burden—raising annual water bills by £250 (USD 317) per user.

“This is daylight robbery. There are two people who can stop it, the judge in court today and Steve Reed, the environment secretary. He can protect billpayers from this by withdrawing Thames Water’s license, on the basis of financial insolvency, illegal sewage dumping, or both,” Cat Hobbs, Director of We Own It, told Peoples Dispatch. “Tony Blair’s government defended the public interest when Railtrack went bust, why won’t this government do the same for Thames Water?”

The company warned that without the bailout, it would run out of funds by March next year. However, Thames Water customers predict that they will be unfairly burdened with the costs of the bailout, including the high interest rates that will follow, while company management will face little accountability. The We Own It campaign noted that “it is obvious that the consumer as the sole source of revenue will indirectly fund this amount by way of increases in their water bills.”

While claiming financial difficulties, Thames Water has managed to secure substantial profit margins for its investors—many of whom are based outside Britain and remain unaffected by the declining quality of local water services—while awarding generous bonuses to its management. This pattern is not unique to Thames Water: all water and sewage companies across England have followed a similar path since privatization under Margaret Thatcher’s administration. During this time, these companies have paid out £72 billion (91 billion USD) to shareholders while accumulating £60 billion (76 billion USD) in debt. The result has been a chronic lack of investment in infrastructure, leading to leaks of both water and money.

“The argument for privatization was that there would be more investment, the water would be cheaper, and the service would be more efficient,” independent MP Jeremy Corbyn remarked during a discussion on water services earlier this year. “It’s really worked out well on that, hasn’t it?”

A risk to ecosystem and human health

In addition to financial losses, privatization has led to a significant decline in water safety and quality. Private operators have regularly discharged untreated sewage into rivers and the sea, causing harm to ecosystems and posing a direct threat to human health. Regulators, meanwhile, are unable to enforce compliance with safety standards due to conflicts of interest, low fine thresholds and the fact that the infrastructure itself remains under the companies’ ownership.

Unlike other European countries that experimented with water privatization by outsourcing service provision but mostly retaining ownership of infrastructure, England sold everything. As a result, rather than waiting for contracts to expire and reclaiming control, the government would need to buy back the entire water system from companies like Thames Water. According to We Own It, the initial cost for this process could start around £15 billion (19 billion USD)—an amount the campaign estimates could be repaid within just six years.

Re-nationalizing water services has led to significant successes in other countries, according to Matthew Topham, Lead Campaigner at We Own It. “Paris took back control of its drinking water in 2010 from an outsourced private contract. Bills were immediately lowered, customer satisfaction levels are high, and last year, they were able to reinvest 89 million euros in improving the network,” he explains. He adds that public ownership has also sparked community participation, with cities like Lima, Terrassa, and Paris establishing observatories to give communities, workers, and activists a voice in managing water services.

Campaigners against the Thames Water bailout are calling precisely for a return to public ownership. They argue that this approach would not only lower costs for users but also create space for more investment in infrastructure, improving water quality. This demand resonates with over 80% of the British public, who support the idea of water services being brought back into public hands.

Read more: Labour considers expanding private sector role in NHS, undermining the already fragile public health system

The Labour government, however, does not share this vision. Under Jeremy Corbyn’s leadership, the party’s program included an ambitious plan to renationalize water services. By 2024, Labour’s election program had moved away from this idea, keeping only the possibility of granting “new powers” to regulators to block bonuses for companies proven to pollute watercourses. As many on the left predicted ahead of the July 2024 election, Keir Starmer’s administration has shown a clear inclination toward privatization, not only in water services but also in healthcare and other sectors.

The final decision on Thames Water’s bailout request is expected in early 2025, with campaigners urging the court to consider users’ concerns and reject the proposal, paving the way for better water services.

Original article by Ana Vračar republished from peoples dispatch under a Creative Commons Attribution-ShareAlike 4.0 (CC BY-SA) license.