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 “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.
In less than two weeks, water privatisation will be on the ballot in the Holborn and St Pancras byelection, when voters elect an MP to succeed Sir Keir Starmer. A campaign to boycott Thames Water bills has sprung up in the London constituency after repeated flooding caused by broken pipes. When asked by the Camden New Journal when the mains were last inspected, maintained or replaced, Thames Water gave “no answers”.
If Labour cannot take a failing private monopoly that ruins lives into public ownership, voters may ask themselves who will? Polls suggest comfortable majorities of Britons believe water companies should be run in the public sector. Under Sir Keir, Labour’s review of the water sector ruled out nationalisation.
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