{"id":45614,"date":"2025-05-14T08:00:00","date_gmt":"2025-05-14T07:00:00","guid":{"rendered":"https:\/\/www.redpepper.org.uk\/?p=45614"},"modified":"2025-08-22T14:16:45","modified_gmt":"2025-08-22T13:16:45","slug":"thames-water-and-the-failures-of-privatisation","status":"publish","type":"post","link":"https:\/\/www.redpepper.org.uk\/economics-unions-work\/privatisation\/thames-water-and-the-failures-of-privatisation\/","title":{"rendered":"Thames Water and the failures of privatisation"},"content":{"rendered":"\n

In April 2025, a Labour government announced they would jail water bosses who \u2018cover up sewage dumping<\/a>\u2019. In what appears to be a radical reform, penalties under the Water (Special Measures) Act 2025 introduce prison sentences for obstructing Environment Agency investigations. Yet those reforms are far from radical, will do little to increase pressure on water companies, and paradoxically may make them less worried about what they fear the most. <\/p>\n\n\n\n

First, the powers have almost no chance of being used given that 20 years of cuts have almost completely removed the Environment Agency\u2019s capacity to prosecute companies<\/a>. Second, this announcement also conveniently shifted all discussion away from how and when water will be taken back into public ownership, the most pressing question this government needs to answer.<\/p>\n\n\n\n

The government\u2019s refusal to support Clive Lewis\u2019s Water Bill in March confirms the strategy here. Lewis\u2019s Bill offered a truly radical solution which would bring water companies into public ownership if they repeatedly caused major pollution incidents. The campaign group We Own It<\/a> propose a similar solution of issuing penalties on shareholders that take shares instead of fines<\/a> when companies fail to provide the service they are paid, by us, to do.  <\/p>\n\n\n\n

Offences against the public<\/h2>\n\n\n\n

Had such measures been in place, there would have been irresistible pressure to impose them on Thames Water in the past few months. The company, controlled<\/a> by a consortium of private institutional shareholders, and investment has been neglected<\/a> in critical infrastructure. <\/p>\n\n\n\n

Despite receiving permission from the regulator, Ofwat, to increase<\/a> water bills to fund improvements, Thames Water has historically prioritised shareholder returns over service quality and infrastructure investment. This has resulted in more than \u00a314 billion in debt<\/a> and no clear way to keep operating without urgent government intervention.<\/p>\n\n\n\n

The consequences of this strategy have been disastrous for our waterways and for public health. Data from Violation Tracker UK shows that Thames Water have continually breached regulations, receiving<\/a> over 100 prosecutions, fines and interventions totalling \u00a3178 million in penalties since 2010. Of these interventions, 88 have been for environmental offences including sewage pollution.<\/p>\n\n\n\n

Public ownership is the only way we can save our crumbling utilities, just as taking oil and gas assets into public ownership is necessary to slow carbon emissions<\/p>\n\n\n\n

Meanwhile, Thames Water executives continue to receive massive bonuses and dividend payouts despite the company\u2019s financial and environmental failures. For example, in October 2023, Thames Water paid<\/a> out \u00a337.5 million in dividends, with a follow up of \u00a3158.4 million in March 2024. Those payouts were found by Ofwat to breach rules<\/a> meant to ensure dividends are linked to performance.   <\/p>\n\n\n\n

The \u00a33 billion bailout of Thames Water by the government means that while profits were privatised, the losses are now being socialised. The public is left paying for the failures of private owners who walked away with massive profits. This scenario mirrors past corporate failures, such as Carillion<\/a> and the East Coast<\/a> rail franchise, where shareholders were able to extract wealth, leaving the state to clean up the mess. And if we go back further, the bank bailouts of 2008<\/a>. <\/p>\n\n\n\n

We cannot repeat the same model. As taxpayers are being forced to keep Thames Water afloat, the company\u2019s owners cannot simply do what they have been doing: diverting public funds and liabilities into the pockets of shareholders.<\/p>\n\n\n\n

A new movement tactic?<\/h2>\n\n\n\n

There is a growing public demand that those who profit the most from the deliberate running down of public infrastructure are held accountable. The Citizens Arrest Network (CAN)<\/a>, launched series of spectacular \u2018citizens arrests\u2019 against the CEOs of water and oil and gas companies in March. A week after he was \u2018arrested\u2019, Alastair Cochran, Thames Water\u2019s Chief Financial Officer resigned<\/a> due to a culmination of pressure. It seems that the CAN action was the last straw. The following week, activists<\/a> served papers on BP and Shell executives, arrested two executives of French oil firm Perenco and attempted an arrest of EnQuest CEO Amjad Bseisu who was able to flee.   <\/p>\n\n\n\n

In Latin America, the tactic is known as \u2018escrache<\/em>\u2019, a direct action strategy that involves identifying powerful figures to publicly shame them. The term was first used by Argentinian human rights group HIJOS<\/a>, to condemn the perpetrators of the mass killings and disappearances committed by the dictatorship between 1976 and 1983. The tactic is used precisely because the perpetrators are able to hide behind a shield of invisibility provided by the military, to claim that their crimes were committed in the name of the \u2018state\u2019. It is the state\u2019s guilt that protects its generals from accountability.<\/p>\n\n\n\n

The Citizens Arrest Network (CAN) are not na\u00efve about the law, or about corporate power. Unlike the Labour government they are not seeking to draw attention away from a system that profits from environmental destruction. Like the esraches<\/em> movement, their strategy aims to expose those that profit the most from the privatisation of water, or from the production of fossil fuels and use their expos\u00e9 as a trigger for social change.   <\/p>\n\n\n\n

And importantly their campaign exposes how the law fails the people. In February 2025, Thames Water won<\/a> a High Court battle to secure a \u00a33 billion rescue loan from the government. This decision had been appealed<\/a> by environmental campaigners at the Court of Appeal who argued that the public and consumer interest are not served by the debt package. In the end, the Court of Appeal ruled<\/a> in favour of the bailout, essentially meaning taxpayers are covering the cost of decades of corporate mismanagement.<\/p>\n\n\n\n

The legal reforms offered by Labour at this crossroads moment for the water industry can only detract from the growing popular demand for public ownership. Public ownership is the only way we can save our crumbling utilities, just as taking oil and gas assets into public ownership is necessary to slow carbon emissions. This is where environmental social movements must begin to focus their efforts in order to build a movement that is both popular and credible. The Citizens Arrest Network and those demanding public ownership are natural allies in a fight which ultimately aims to dismantle the private structure of common assets and take back control for the people.<\/p>\n","protected":false},"excerpt":{"rendered":"

More than any other privatised company, Thames Water has become a lighting rod for public anger. Eleanor Godwin and David Whyte explain why \u2013 and what we can do about it<\/p>\n","protected":false},"author":33,"featured_media":45615,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[620,515],"tags":[3073,3074],"class_list":["post-45614","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporations","category-privatisation","tag-david-whyte","tag-eleanor-godwin"],"yoast_head":"\nThames Water and the failures of privatisation - Red Pepper<\/title>\n<meta name=\"description\" content=\"Thames Water has provoked a very high level of public anger. 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