Lord Prem Sikka, a Labour peer and academic, described any potential hike as a “con.”
“Customers, not shareholders, will provide capital and own absolutely nothing in return,” he added. “Current shareholders will get dividends, [while] customers [get] big bills”
Campaign group We Own It called on the government to nationalise the ailing water company.
“The crisis at Thames Water demonstrates everything that is wrong with water privatisation,” director Cat Hobbs said.
“Of course the shareholders want us to pay to clean up their mess – they want to hike our bills by an eye-watering 40% while they pour sewage into our rivers. The government must stand up to this company which is in debt because it has extracted £7bn in dividends since privatisation.”
What’s gone wrong at Thames Water?
Thames Water is heavily indebted. Since it was privatised in 1989, it has accrued around £14.7bn in debt.
Much of this debt was built up when Thames Water was owned by Macquarie, an Australian infrastructure bank.
Macquarie claims that it invested billions into upgrading the company’s sewage discharge infrastructure. But it also took out billions in loans and dividends to funnel to shareholders.
Thames Water could collapse under the weight of its debts. Current shareholders agreed to give it £750m last summer – but last week pulled out of the deal.
It blamed Ofwat (the water regulator), which has pushed back on potential bill increases.
“After more than a year of negotiations, Ofwat has not been prepared to provide the necessary regulatory support for a business plan which ultimately addresses the issues that Thames Water faces,” the shareholders said in a statement.
“As a result, shareholders are not in a position to provide further funding to Thames Water.”
We Own It’s Cat Hobbs said that ordinary people are being forced to pay for private company profit.
“25p in every pound that Thames Water households pay already goes directly to service [Thames Water’s] debt mountain,” she said.
“The privatised English water companies treat customers like a cash machine, and our rivers and seas like a toilet.”
The campaign organisation has published an open letter calling on the government to bring Thames Water into permanent public ownership, pointing out that seven in 10 people support nationalisation.
Thames Water has also attracted a slew of negative headlines in recent years for pumping raw sewage into Britain’s waterways.
The company discharged at least 72 billion litres of sewage into the River Thames between 2020 and November 2023 – roughly equal to 29,000 Olympic swimming pools.
Green MP Caroline Lucas said that the “writing is on the wall” for the beleaguered company.
“Endless sewage, supply outages and no money to sort it out,” she said. “It’s clear Thames Water cannot run this vital public service – none of these companies can. We need to bring them all into public ownership.”
