THE crisis of capitalism is running out of your taps and pouring into our rivers. Britain’s water industry is lurching towards calamity, poisoned by the priorities of profit and abetted by politicians in the pocket of the privateers.
The largest water company in the country, Thames Water, appears to be on the edge of insolvency after its investors refused to pump in cash essential to the company’s survival — apparently because the reluctance of regulator Ofwat to authorise even steeper increases in bills to households made it an unattractive bet.
And alarm was spread about the annual Oxford-Cambridge boat race on Saturday having to row through the sewage-ridden Thames, with doubts being cast on maintaining the tradition of throwing the cox of the winning crew in the river on health and safety grounds.
Now there are calls for the government to declare a national emergency as discharges of raw sewage into rivers and seas across Britain reach a record high.
These are the fruits of the handing over of the most basic resource to the tender mercies of monopoly capital. The sewage in the rivers is one side of the coin, the riches sitting in shareholders’ bank accounts is the other.
The industry was privatised by the Tories in 1989 debt-free. However, the miscellaneous hedge funds and spivs who took over the utilities loaded them with debt while paying shareholders astronomical sums in dividends — in some cases greater than the profits being made by the companies.
Investment took the hit, with the resulting epidemic of leaks from ageing pipe networks and sewage discharges from infrastructure not able to cope. Bills to customers soared all the while.
Ofwat, the regulator of the industry, was supposed to guard both the consumer interest and the financial stability of water companies. It has done neither, instead green-lighting mounting debt levels and inflation-busting bill increases.
It is a salutary warning to anyone who believes regulation to be an adequate substitute for public ownership. Ofwat is one of the clearest examples of a regulator being captured by the monopoly interests it is supposed to oversee, with its mission turning into keeping the privatised show on the road.
And regulators came to identify their personal interests with the private companies. An analysis last year found 27 former senior Ofwat executives and consultants now working in the industry.
To take just the most egregious example, the co-chief executive of Thames Water Cathryn Ross was previously chief executive at the regulator, in which role the water companies were allowed to run up the present mountains of debt.
She was unapologetic when questioned by MPs for having allowed the company she now manages to run up enormous debts when she was its regulator.
The taxpayer will likely have to pick up the bill for her failure. It was scarcely reassuring to be told today that Thames Water has enough cash to last another year or so.
Pressure will now be placed on Ofwat to do the investors’ bidding and allow the mismanaged company to fleece consumers to secure the private rescue funds it needs to stay in business.
It is clear that the only way to bring an end to this almost criminal corporate misconduct is to bring the whole industry back into public ownership.
Nationalisation may be forced on the government in the case of Thames Water. But state control can only work in a context of planning, investment and a role for both workers’ and consumer interests.
That was Labour Party policy until Keir Starmer abandoned it. It is time the labour movement demanded its reinstatement.
