THE headlines about illegal sewage disposals have been stark enough. They make the nation’s map look like a bad case of chicken pox. Now the owners of Thames Water have defaulted on the debts they owe. The situation spirals from bad to worse.

• Water companies have dumped four million hours’ worth of sewage into Britain’s rivers during the last year;
• This is a 129 per cent increase on the previous year;
• Fish in the Portsmouth estuary now test positive for cocaine, anti-depressants and the contraceptive pill;
• In the 35 years before privatisation the UK built almost 100 reservoirs, in the 35 years since then none have been built, and
• Post-Brexit, the UK has opted for lower water standards than the rest of the EU.

The water industry claims sewage dumping is down to more torrential downpours and more vigorous national monitoring of “sewage spills” by the Environment Agency. But pause and think about this for a moment.

When Margaret Thatcher privatised water in 1989 she wrote off all the industry’s debts. Since then, private owners paid themselves £60 billion in dividends, largely by loading the companies with £80bn in debts (often owed to owners themselves). What companies failed to do was upgrade the disposal system to cope with the problem of sewage waste.

Even before water privatisation, scientists warned that climate breakdown would begin with the growth of “wild weather” events. The water industry have had three decades to plan for this, but decided not to bother.

Now they offer the “more vigorous monitoring” excuse; an absolute pearler. The Environment Agency is only doing what it ought to have been doing all along — monitoring properly. 

If supermarkets reported an increase in shoplifting figures following the installation of CCTV cameras you wouldn’t blame the cameras for the increase in recorded crime. You’d pin it on the thieves. Water companies are simply being caught committing crimes they’d got away with for years.

What this hasn’t meant is that companies have been fined for such law-breaking. Quite the opposite. Year after year, the number of penalties issued by the Environment Agency against water companies has declined. It makes a laughing stock out of the notion of public accountability. No wonder water companies shrug off their statutory duties.

It has taken ferocious (and fantastic) public campaigning to turn this dirty game around. But even now, private capital wants a public rescue.

Thames Water shareholders have refused to fund the investment needed to clean up their act. They want taxpayers to foot the bill.
  
Politically, we are all over a barrel in the choices to be faced. What we can do is put the interests of society before those of speculators.

Financial chasms

The House of Lords estimated that the cost of removing sewage overspills from Britain’s rivers and beaches is in the region of £260bn. It is probably right. This makes water industry proposals (to invest £10bn over the next seven years in clean-up measures) look derisory. Department of Environment plans (to invest £56bn over the next 27 years) don’t look much better. Such timescales would not restore clean beaches to our children or even our children’s children.

But if big clean-up costs are unavoidable the politics of water can at least be transformed. The end of water privatisation should be Parliament’s first contribution to “assisted dying.”

Setting overriding clean-up duties on water companies would be the start. If these had to be met before dividend or private debt repayments are made, most companies would declare themselves bankrupt. The government could either buy the debt (for 1p in the pound) or swap it for zero-interest government bonds.

This would still leave a huge shortfall in the funding needed for a clean-up programme. That’s where we a better use of existing British financial assets comes in. Some 80 per cent of such assets are currently held in tax incentivised accounts (pension funds, ISAs, etc). Their value amounts to something in the region of £7.5 trillion.

Britain’s tax-free ISAs are particularly popular and a specific “Water ISA” would deflect an important slice of such savings into cleaning up our sewage system. The task itself is challenging, but not insurmountable. The key is to not let private debt holders anywhere near it. This requires political leadership.

Thames Water must be allowed to declare itself bankrupt; its loans written off against its liabilities. When the government steps in it should be to run the company on a not-for-profit basis. Let speculators take the hit, not the public.

But behind this cameo of private greed and public exploitation there’s a bigger set of issues that needs unravelling. It comes down to the politics of servitude.

Second-class citizenship

Post-war Britain saw a huge expansion of citizen entitlements. The NHS, state pensions, public transport, council housing, National Insurance and the public ownership of gas, water and electricity — all were part of an inclusive framework of civil society. Public utilities were nationalised, as was accountability. 

Those in charge carried personal and collective responsibilities, even if they were more to government than to the public. Still, as citizens, we had collective rights.

Thatcher’s privatisations changed all that. It wasn’t just about ownership. With it went a steady diminution of corporate responsibilities. 

Shareholders became more important than citizens. And as corporate freedoms increased, so too did citizen obligations. Means-testing replaced universal entitlements, as politicians played fast and loose with distinctions between the deserving and the undeserving poor. Political leaders might argue the case for curfews on disruptive neighbourhoods but not for curfews on wayward and disruptive money movements.

Cyber-citizens: the artificial aristocracy

As money and accountability then moved offshore the government needed a fig-leaf of distraction. It came in the guise of “the good corporate citizen.” 

Disappearing statutory duties were replaced by more elusive ethical ones. MPs found themselves besieged by companies reducing their front-line public services while offering to fund arts and play schemes instead. A new tier of cyber-citizens was created, imbued with an array of ethical virtues, but with diminishing public duties.

New Labour then took this into the duplicitous ethics of public-private partnerships (PPPs). Initially, these counted as “off-balance-sheet accounting,” allowing the government to pretend that, by transferring risk from the public sector to the private sector, economic renewal could come at no increased public cost.

Siren voices warned that it was ownership (rather than risk) that was being transferred, and that contracts were massively overpriced. All were ignored. The new corporate owners of public services were given citizen status at the same rate at which real citizen rights were replaced by a language of duties.

In part, this is why we now struggle to bring such utilities back into the public domain. From the Post Office to water companies, to train operators and the rail network, shareholder interests came to override societal ones … by a long margin.

The return of servitude

Labour must address this long before the general election. For an incoming Labour government will inherit an even bigger nightmare.

Rishi Sunak’s legacy will include 12 freeports and 74 special economic zones. Each of these will have been given deregulated freedoms that free them of citizen entitlements (and employment obligations) that apply to the rest of Britain.

Tory scaremongering about a Britain taken over by foreigners will be replaced by praise for a land where foreign companies are unfettered by tax obligations or employment rights. Corporate colonialism will have come home to roost.

Opting out isn’t impossible but, as Honduras is discovering, escape involves running the gauntlet of a secretive court process (favouring corporations) called the Investor-State Dispute Settlement (ISDS) regime. Sunak is dragging out time until our own return to such servitude is in place.

This is the battleground ahead. But Labour has yet to set out unequivocally that the citizen, not the corporation, will form the centrepiece of “democracy restored.”

Embracing the alternative

If it wished, Labour could embrace a ready-made alternative. In his forthcoming book (The 15-Minute City) French academic Carlos Moreno explains how a network of 15-minute cities, within Paris’s existing boundaries, is transforming and restoring the quality of life to its citizens.

Networks of local shops, employment opportunities, parks and decent housing have reinvigorated Parisian neighbourhoods. These run from some of the wealthiest districts to the poorest, and form the basis of a revived approach of urban planning. It is being replicated from Milan to Buenos Aires — but not in Britain.

To divert attention from the corporate feudalism of freeports, the Tories turned the case for liveable cities into a faux battleground; branding them as an assault on motorist freedoms. In truth, these may be the most effective way, not only of returning power to citizens but also in shifting to a low-carbon economics; one that makes a virtue of low-carbon miles and local supply/repair networks — all things our grandparents took for granted in the neighbourhoods they grew up in.

This is Labour’s big challenge; spurning the distraction of semi-naked MPs in favour of a more direct challenge to the semi-naked politics that now threatens both our democracy and survival.

Alan Simpson was sustainability adviser to shadow chancellor John McDonnell MP (2017-20) and Labour MP for Nottingham South (1992-2010).