Water is the basis of life, yet in complete contempt for the working class in 1991 the British ruling class threw the public water utilities into the hands of rapacious private investors, so converting public revenues into private profit. Water prices have been raised continuously as the water and sewerage system is left to stagnate and fail. There is no clearer example of the failure of capitalism to meet the basic needs of the people.
Since 1991 there has been a 44% real increase in water bills in England and Wales, and industry debt has risen from £0 in 1989 to £72bn in 2023 because the owners have raised debts to pay dividends, so also imposing a huge interest bill to benefit the lenders – big finance gets 35% of the water bills. Weighed down by dividend and debt payments, capital investment has stagnated, with sewage pumped into rivers, lakes and coastal seas. The industry has been looted, leaving the working class to pay off those private debts as the companies face self-induced bankruptcy. ‘Pillage and run’ is their obvious motto. No other G7 country has privatised its essential services and infrastructure as much as Britain.
Water pollution incidents in England categorised as ‘Most Serious’ rose by 60% in 2024. There were 994,499 reported incidents throughout Britain. Thames Water, Southern Water and Yorkshire Water accounted for the majority of instances, but all water companies were found to have ‘consistently poor performance’ by the Environment Agency. The Environment Agency has itself been criticised for the decline in oversight of the water companies and water quality, leaving it largely to ‘citizen scientists’ and universities to expose the appalling levels of pollution in the country’s water. It is individuals’ work which revealed the high levels of bacteria caused by human faeces in Lake Windermere, a popular tourist area used for swimming and water sports. Only 14% of Britain’s rivers and lakes meet ‘good’ ecological standards, with the water companies and capitalist farming methods being the most responsible for this state of affairs. Raw sewage was discharged into rivers and coastal waters for 3.6 million hours in both 2023 and 2024.
Since privatisation, the water companies have paid out over £74.2bn in dividends and amassed more than £69.2bn in debts, whilst providing a deteriorating service. Lack of infrastructure investment has left it unable to cope with periods of either excessively wet or excessively dry weather and lead to the degrading of our rivers, lakes, and seas. Severe pollution incidents were met with fines only in the tens of millions of pounds; insignificant compared to shareholders’ rewards.
This has led to a crisis situation, especially with Thames Water, which has debts of £20bn and a credit rating of ‘below investment grade’. Thames Water faces being put in Special Administration, a temporary nationalisation, although Labour’s Chancellor of the Exchequer Rachel Reeves favours a ‘market-based solution.’ The only option for such a solution is with a consortium made up of more than 100 creditors of Thames Water, calling themselves London & Valley Water. Few details of the talks between the consortium and Ofwat, the regulator that oversaw Thames Water’s shambolic performance, have been made public – other than the £20.5bn of customers’ money they intend to use during 2025-2030, and the offer of a 20% write-down on the debt. They are pushing for leniency from fines and penalties whilst proposing the delivery of fewer improvements than those required by Ofwat over the next five years. The talks are struggling to obtain an ‘investment grade’ rating that is sufficiently lucrative to retain private investors, the requirement for its operating license.
Threatened by financial corporations with higher interest rates, any temporary ‘nationalisation’ by the government, far from being a progressive solution, would only buy time to attempt to turn the industry around, forcing capital repayment costs on to the working class, in order to sell them off again as a profit-making propositions.
Even temporary nationalisation is fraught with risks for the British economy, which is reliant on a supply of foreign investments (Thames Water was 80% owned by overseas investors), to partially compensate for the balance of payments deficits, and provide a flow of cash to maintain capital accumulation . Nationalisation would put off potential investors and creditors. Capitalism, in this imperialist epoch, demands that Britain remain a safe place to invest in to accumulate capital. Therefore essential services for the working class have to be minimised. The only real alternative facing the British working class is a a socialist society that prioritises the needs of people, rather than extorting profits.
David Hetfield
FRFI 308 October/November 2025
