Hi ,
Thames Water is back in court today arguing that it should be allowed to take on £3bn worth of debt (with a crippling interest rate of 9.75%) in order to avoid total collapse. This debt, alongside the £300m or so of interest payments that would accrue over two and a half years, would of course be paid for by the customers in Thames Water's monopoly.
This is an issue that far exceeds the 16 million of us trapped in Thames Water's coverage area. As the Big Issue's report notes, Thames Water claims this money is needed to fix their enormous sewage dumping problem – but an analysis from environmental scientists found evidence of disinformation on a massive scale from the nine major water and sewerage companies in England. This includes a "deliberate attempt" to mislead regulators in order to avoid fines and attempts to greenwash, mislead, and manufacture doubt about their activities in order to keep profits high.
Clearly, England's uniquely privatised water system is a failed one, and the only sensible way to proceed is to nationalise Thames Water and the other failing water companies, as protestors outside the court have demanded the government do.
However, the root problem is one that engulfs the whole of the UK: our entire economy is structured around shareholder demands. Thames Water's £16bn of debt was taken on by private equity companies to pay shareholders and CEO bonus payments in much the same way that the wider water system took on £60bn of debt in order to pay £78bn of shareholder payments since privatisation; in much the same way that other bits of key infrastructure, from energy companies and banks to supermarkets or social care, have been swallowed up by private equity and the shareholder demands for payouts that come with it. This has been a dramatic cultural change within business over the last hundred years, and one that's deepened inequality.
This problem ballooned after Covid, peaking at £152bn in deals in 2021, and is once again growing in what regulators fear will cause a systemic risk to the UK's economy. These same regulators, however, have been ordered to prioritise growth, and perhaps this is the real face of a "growth at all costs" mantra: debt, payouts, disinformation, and systemic risk.
Shareholders should not hold so much financial, and by extension political, power. Thames Water's collapse shows how much of the promise of growth under the shareholder-first model is built on sewage. |
