The only thing more annoying than the British media’s obsession with wild swimming – or “swimming”, as it was once known – is the fact that when you do want to go swimming in open water, you can’t. The rivers are a toxic soup, the fish are addicted to methamphetamine, and no one in Westminster has an answer the country can afford. That may be about to change, however: for the first time, MPs are now formally raising the idea of new ownership structures, including renationalisation.
The issue of polluted rivers and steeply rising water bills has been a running political sore for years now. Most people agree that privatisation of a monopoly on which we all depend for survival was a terrible idea; when your free-market dogma is so damaging that even the Americans won’t repeat it, a mistake has certainly been made. But it has also been generally agreed that un-privatising the water and sewerage system would be so expensive it’s not achievable, and so the only thing to do was to try to ask private water companies to stop doing capitalism. This didn’t work, obviously, as a report published this morning by the cross-party Environment, Food and Rural Affairs committee makes clear.
The water sector, the committee finds, is “failing”; it “has completely lost sight of its purpose and increasingly operates as a network of financial services businesses rather than custodians of a public good.” Almost any Briton over the age of six could have told the MPs this, but it is encouraging to see it recognised formally by a parliamentary committee.
However, the important part of the report is this: “We see merits in the argument that the current models of ownership in the water industry may not be bringing about the culture the sector needs.” It encourages the Independent Water Commission (or IWC, which is currently preparing its own proposals for reform of the water sector) and the government to explore “different ownership models”, including “degrees of public or employee ownership”. “The government should feel able to use its temporary nationalisation powers”, it states.
To a great extent, the report recognises the workings of the water industry itself – complex financial structures loaded with debt, executives who award each other extremely high salaries and pay out tens of billions in dividends to owners – is the fundamental problem. What looks like “serious economic mismanagement” to the rest of us has made a handful of people a great deal of money.
It doesn’t go as far as recommending a full return to public ownership, which would be hugely expensive; companies such as Thames Water aren’t worth much themselves, but their assets are, and the government can’t illegally help itself to large chunks of private property, especially as much of it is owned by people in other countries. However, a mix of new rules, structures and reformed regulators could tie up the water industry so tightly that it might as well be nationalised. With another parliamentary committee (the influential Public Accounts Committee) also investigating water regulation and the IWC readying its own report, it may be that the tide is turning.
[See more: The £39bn housing paradox]
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