Thames Water is on the brink of collapse, with emergency plans being drawn up to take the company into temporary public ownership. It’s an extraordinary state of affairs: how could a business with a regional monopoly over an essential service not manage to maintain a financially sustainable footing? The answer: an extractive ownership model has seen the company loaded with debt, and returns for its investors prioritised over the needs of both people and the environment. As interest rates have risen sharply over recent months, this inherently precarious business model has come under acute and seemingly fatal pressure.
The story of Thames Water is emblematic of wider failures of privatisation. Since the late 1980s, water companies in England and Wales have paid out £72bn to shareholders. To help pay for this generosity, the water companies – which were sold off without debts – have borrowed on an exceptional scale, accumulating a debt pile of £53bn.
