There can be no greater example of the great British privatisation rip-off than the capture of British water by private profiteers.
English water companies have dished out more than £2bn a year on average to shareholders since they were privatised by Thatcher in 1989. Dividends to shareholders of parent companies between 1991 and 2019 amount to £57bn – almost half the sum they spent on maintaining and improving the country’s pipes and treatment plants over the same period. As part of Thatchers deal she wrote off all debts. Analysis shows that the nine privatised companies in England have amassed debts of £48bn over the past three decades – almost as much as the sum paid out to shareholders.
At the same time, analysis of figures obtained via environmental information requests show that Water companies in England discharged raw sewage into rivers on more than 200,000 occasions last year, with untreated human waste being released into streams and rivers for more than 1.5m hours in 2019.
On top of that, we are losing 3.17 BILLION litres of water A DAY.
Thames Water is the worst offender as it loses around 179 litres of water PER PROPERTY each day. The least worst is Southern Water which leaks less than 80 litres per property per day, which is still an incredible waste.
Water is arguably the most important commodity on Earth. Although 71% of the Earth’s surface is covered with water, only 0.3% of this water is usable by humans. The rest is in oceans, soils, icecaps or the atmosphere.
So who owns our water?
You may not be surprised to discover that it is billionaires, banks, investment funds, foreign governments and pension funds that are cashing in each time you take a shower or drink a glass of water.
Anglian Water – Shareholders are Canadian and Australian pension funds.
Northumbrian Water – A Multinational Conglomerate based in the Cayman Islands and a Hong Kong ‘charity’ foundation.
Severn Trent South – Banks and investment funds from the US, Australia, Bermuda, Germany and Norway.
West Water – Investment funds, banks and financial service companies from US, Switzerland, Australia, France and Bermuda.
Southern Water – Banks, multinational conglomerates, investments and pension funds from the US, Switzerland, Australia and Bermuda.
Thames Water – Pension, investment and Sovereign Wealth funds from Canada, UAE, Kuwait, China, Australia and the Netherlands.
United Utilities – Banks, investment and pension funds, multinational conglomerates, Sovereign Wealth funds and financial service companies from the US, Norway Japan and Germany.
Wessex Water – A multinational conglomerate from Malaysia.
Yorkshire Water – Banks, Sovereign Wealth , investment and pension funds from Singapore, the US, Germany and Australia.
When we ask ‘who owns your water’, we’re really asking who owns the shares in the nine companies that provide water and sewerage throughout England (Scotland and Northern Ireland’s water supplies are publicly-run, Wales is not-for-profit – none have shareholders). This gives them control over the direction of those companies, and a right to receive cash returns from profits made (and how: £6.5 billion in dividends paid out between 2013 and 2017).
Thanks to the seriously radical way England’s water was privatised, the companies themselves own all the pipes, reservoirs, treatment plants and so on that together make up the water and sewerage system … To make the water companies even more attractive to global capital, the New Labour government decided in 2002 to amend the licences under which they ran the supply. As a result, the companies cannot lose those licences to a rival unless the government has given them “at least 25 years’ notice”. In the words of a paper from the University of Greenwich: “there is thus no prospect of any competition in the foreseeable future unless the laws are changed”.
This means anti-privatisation campaigns cannot just wait for the companies’ licences to end to replace them, as has happened elsewhere in the world. The current contracts have to be broken.
Added to this, the attitude of the regulator Ofwat hasn’t exactly been stringent. In the last thirty years, prices have been allowed to rise 40% above inflation.
So these companies have been extremely attractive to people looking for good investments for their cash. The big ones sit in the FTSE 100 list of biggest UK companies, valued higher than Marks & Spencer and other household names. Selling a product that everyone needs without facing any competition turns out to be a pretty good business model.
As with other privatisations, water was sold off with the spin that we could all own shares in the new companies. The ensuing ‘shareholder democracy’ would give us far more power to hold the companies accountable.
Thirty years on, almost two thirds (63%) of the overall supply is owned by just 20 organisations, each managing billions of pounds of investments across the world. In total, at least 85% is owned by so-called ‘institutional investors’. It’s not even possible for members of the public to buy shares in six of the companies as they have been bought out and taken off the stock market. Only Severn Trent, United Utilities and South West Water remain on the stock exchange (the latter through it’s owner the Pennon Group).”
And who do we have monitoring these water companies? The All Party Water Group, a cross party MPs group which just happens to be funded almost entirely by the water industry.
Until recently the Blairite MP Angela Smith chaired the All-Party Parliamentary Water. She championed the interests of private water firms against her own Party’s nationalisation plans.
Throughout 2016-17, Angela Smith and her husband were repeatedly treated to corporate seats at Sheffield Wednesday FC and dinner by Whitehouse Construction – a subcontractor to Anglian Water and a member of the “Future Water Association”, an industry group led by private Water firms … which also funds Angela Smith’s “All Party Group”
Most of the criticism came via ‘The cost of nationalising the water industry in England’, an assessment report from the Social Market Foundation who claim it will cost £90 billion to nationalise the Water Industry.
Guess who funded the report…
“This report was commissioned by Anglian Water, Severn Trent, South West Water and United Utilities, and was produced independently by the Social Market Foundation.”
When Paris re-municipalized its water supply in 2010 it was able to cut costs immediately by $46 million (p.169) and reduce prices by eight per cent – all the while increasing the democratic involvement of staff, users and local non-profits.
For Angela Smith’s dedication to protecting private water companies interests she has landed a plum job working for Portsmouth Water as an independent non-executive director, as of July 1st, 2020. Because that’s how it works in the U.K. with the revolving door, Public Servants get Private Paydays and failure is too often rewarded.
Take the example of Steve Robertson. He was boss of Thames Water up until last May when he was sacked for his failure to tackle leakages and the subsequent £120 million of fines while in charge. Since being sacked Robertson has been paid £2.8 million by Thames Water. This is not an uncommon practice.