When Thames Water’s bosses were hauled up in front of Parliament’s Environment Select Committee on 13 May you could almost see the sewage hitting the fan!
The water bosses were unable to answer quite a few important questions put to them. Would they still need a further increase in charges to customers, around 59% this time, to make ends meet? Why had they included a civil immunity clause as part of the new loan agreement? How had Thames managed to lose £1billion in derivatives? Would they be relying on customers to top up their precarious pension fund?
The Environment Committee also asked about those huge bonuses Thames bosses have been paying themselves in spite of pollution incidents going up by 40% in 2024. Chairman Adrian Montague claimed that the bonuses awarded to his team were a necessary part of a recovery plan for Thames and had been “insisted upon” by creditors as a condition of their big bailout loan. Days later he was forced to admit publicly that this was not true and he “may have misspoken” on this one. The Committee were not impressed with being lied to and have written to ask him whether any further areas of his evidence to them were “less than completely accurate”. He hasn’t answered yet.
But Environment Secretary Steve Reed still thinks everything is fine. He’s very proud of his Water Special Measures Act that has banned unwarranted bonuses and made it easier to bring criminal charges against those wicked water bosses who chuck sewage in waterways and charge us ever higher prices while doing so.
He’s also very proud of the Water Commission he has set up to restore the public’s shattered confidence in the water sector. Unfortunately, in setting up this so called “Independent” Commission, he explicitly prevented it from considering public ownership as an alternative to the failing privatised system and directed it to focus only on reforming the regulatory system.
Campaign group Windrush Against Sewage Pollution demonstrated the impact Steve’s Commission is actually having on public confidence when they sent a letter to the Commission’s Chair, co-signed by several environment groups, saying “We hereby alert you to the compromised nature of the Water Commission and the risk to your own reputation as the Commission delivers its recommendations with one arm tied behind its back and its eyes carefully averted from the truth about the role of privatised water in the overall failure which is likely, therefore, to continue.”
Thames Water’s record since privatisation is not pretty. Of the bill money paid by Thames’ 16 million captive customers, £7billion has been lost to dividend payouts and the company has racked up nearly £20billion in debt. Water supplies are at risk because they have sold off 25 reservoirs and have failed to maintain leaky pipes which are losing 570 billion litres of fresh water a day.
And the failure is certainly continuing apace.
At the beginning of June KKR, the private equity firm that Thames and the Government have been banking on to avert a total financial collapse of the company, withdrew their £4billion bailout package. Unbelievably, on the morning that this crushing announcement was made our wily Environment Secretary Steve Reed was on LBC’s Nick Ferrari show still insisting repeatedly that Thames Water was “stable” and on the road to recovery.
On 7 June the Guardian reported that the new bidders lining up to rescue Thames Water for us have demanded that the company and its management are given immunity from prosecution for serious environmental crimes. So that regulatory reform is also going well then is it Steve?
It should now be plain to our Environment Secretary that the only way to sort this water crisis out is to take Thames Water back into public ownership. If we stopped throwing money down the drain with payouts to greedy shareholders and servicing risky private equity loans we could save billions to invest instead in protecting our environment and saving our pockets with a water system that works.
If you agree please sign the ‘We Own It’ petition here.