The Guardian paper has published an exclusive report that revealed that Thames Water, the UK’s biggest water company, diverted cash meant to clean up polluted water supplies, into the pockets of their bosses and shareholders.
According to the newspaper, ‘Thames Water diverted millions of pounds pledged for environmental clean-ups towards other costs including bonuses and dividends.’
Thames Water, which serves over 16 million customers, was fined last week by the water regulator Ofwat. The fine of over £18 million was for making unauthorised and ‘unjustified’ payments to shareholders of £37.5 million.
The Guardian has now revealed the extent of Thames Water’s attempts to keep the public in ignorance of its massive payouts in bonuses and dividends.
The paper revealed that: ‘Discussions – held in secret – considered the risk of public and regulatory backlash if it emerged that cash set aside for work such as cutting river pollution has been spent elsewhere.’
While Thames Water cut back on its promises to spend on cleaning up the raw sewage pouring into rivers and water supplies, it was paying staff bonuses worth hundreds of thousands, along with tens of millions handed out to shareholders as dividends.
All the time, its company bosses were claiming in public that improvements to environmental performance and cutting pollution was the number one priority of the company.
Like every privatised public service, the only priority of Thames Water was to its shareholders and bosses.
Thames denied as false accusations that it had ‘secretly’ diverted funds, while admitting that some of the funds had been used for ‘other business costs’, including bonuses and dividend payments.
Thames Water leads the way, for all the privatised water companies created by Tory Prime Minister Margaret Thatcher in 1989, in being drowned by debt and subject to public outrage at the extent of their pillaging of public money, while pumping raw sewage into the water supplies and rivers.
When she privatised water, Thatcher wrote off the £5 billion of debt owed by the nationalised water industry, meaning all the private water companies including Thames started off debt free.
Since then, Thames alone has piled up a massive debt that today stands at around £16 billion.
For years, water companies like Thames could afford the debt, as interest repayments were significantly lower than that of other companies.
Interest payments on this debt were below 2% as investors believed water companies were a cast iron safe haven for their money on the basis that workers and the middle classes could not simply give up water or switch to another provider.
These companies enjoyed a monopoly position, where they could extract money from the pockets of workers and when they required more to satisfy their shareholders, then they could demand Ofwat increased the amount charged to households.
On the very day that Ofwat fined Thames Water, it announced the company would be allowed to increase charges to households by 35%.
Even this increase will not save Thames Water, which announced that it only has enough money to stagger on until March 2025, after which it will collapse into bankruptcy.
Thames Water is appearing before the High Court to beg permission to borrow a further £3 billion to avoid bankruptcy, and allow it to carry on until September, after a minority of its shareholders wanted to cut their losses and wind the company up.
While Thames and the other water companies are drowning in debt, the working class has had enough of this essential resource being in the hands of financial leeches and are demanding re-nationalisation.
The response of the Labour government has been to dump all previous commitments to taking back water into public ownership, claiming that it would cost £90 billion and that would ‘impose a huge burden’ on public finances.
With the Labour government refusing to re-nationalise water supplies, the time has come for the working class to demand the TUC act by calling a general strike to bring it down, replacing it with a workers government that will take back control of water, along with nationalising all the major industries and banks without any compensation, and placing them under the control of the working class.
