Bill payers should not fund another rescue for financiers of the water industry. Public ownership can end the cycle of extraction and failure
This month, a cross-party parliamentary committee said Thames Water should be placed in temporary state control and that any takeover by its creditors should be halted. The MPs were right. The “special administration” regime keeps the taps running while shareholders are wiped out, creditors take a haircut and the firm’s £19bn of debt is restructured. But it must not then be handed back to private hands. After Thames Water has failed its 16 million customers, polluted rivers, paid out billions to shareholders and repeatedly demanded higher bills, a City-friendly reprieve would only reward the outrageous behaviour that the regulatory system is meant to deter. Ministers ought to seize the opportunity to nationalise Thames Water.
In July, Andy Burnham agreed. On the campaign trail in Makerfield, he told reporters that “there’s a very strong case for public ownership [for Thames Water] to sort out its problems”. Having entered parliament and become prime minister, Mr Burnham is instead looking at letting elected mayors “oversee” private water companies. There is nothing wrong with more democratic scrutiny. However, oversight without ownership and proper control seems like a sleight of hand. Voices from different wings of the party recognise this. Mr Burnham can’t kick the decision down the road for ever.
