THE likelihood of Thames Water being taken into public ownership has significantly increased, following the shareholders’ refusal to provide £500m in urgent financial support.
This decision came after the water regulatory authority, Ofwat, proposed conditions that would adversely affect the investors’ multi-billion returns.
Chris Weston, the chief executive of Thames Water, has indicated that without the necessary funding by the end of the following year, the company may face special administration.
This would mean government control over the utility, yet, he mentioned, ‘we are a long way from that point at the moment’.
The Liberal Democrats have urged for immediate government intervention in Thames Water’s management, advocating for eventual nationalisation. Labour, expected to be the next government according to polls, emphasised ensuring new investment to repair the sewage system ‘without burdening taxpayers’, without explicitly mentioning nationalisation.
The Green Party’s Lady Jones proposed letting Thames Water collapse to facilitate its acquisition into public ownership at a lower cost.
She stressed, ‘People are already floating the idea of temporary nationalisation, but we should be discussing long-term public ownership to deliver a long-term investment programme.
‘All politicians of all political parties must question and reject their ideological belief in water privatisation; it has failed.’
Jones highlighted the failure of water companies to invest public funds appropriately, pointing out that the amount paid to shareholders since privatisation mirrors the investment needed for sewage system repairs.
The push for Thames Water’s permanent nationalisation, particularly from Labour’s left wing and external parties, is gaining momentum. Should Labour win the forthcoming general election expected within the year, it would face increased pressure to tackle the issues within the privatised water utilities.
Caroline Lucas of the Green Party and Labour’s Lord Sikka have both advocated for the nationalisation of water companies in England and Wales, arguing against bailing out Thames Water shareholders and instead letting the company go bankrupt before nationalising it.
The GMB union accused Thames Water shareholders of blackmailing customers and Ofwat by withholding the promised £500m investment due to the regulator’s conditions.
Gary Carter, a GMB national officer, criticised the shareholders for refusing to invest in essential infrastructure and maintenance, putting undue pressure on bill payers.
