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The revelation that ministers are considering bringing Thames Water into temporary public ownership has reopened the fierce debate over the privatisation of the country’s water industry.
The sudden resignation of the company’s chief executive and Sky’s exclusive report into government contingency plans for the firm’s potential collapse comes amid growing calls for change following a string of controversies and scandals to hit the sector in recent years.
‘Vast improvement’
The current system of private monopolies dates back to 1989 when Conservative prime minister Margaret Thatcher sold off the publicly-owned water and sewage industry in England and Wales for £7.6bn.
She vowed it would lead to a new era of investment, improve water quality and help bring down bills. Her government also wrote off all debts and established Ofwat to regulate the industry.
Supporters argue that the water industry is now significantly better, while also acknowledging improvements are still needed.
Water UK, the industry body which represents firms, said on the 30th anniversary of privatisation in 2019 that the situation had “vastly improved” with a fall in supply problems, pollution, and leaks thanks to nearly £160bn worth of investment over the decades.
It also claimed that “average bills today are broadly the same as 20 years ago, once inflation is taken into account”.
However this is disputed.
‘The most egregious rip off’
Opponents say privatisation has led to soaring bills, poor performance and years of under-investment, and claim that the pay of executives and shareholders has been prioritised at the expense of long-suffering customers.
They also point to a National Audit Office study in 2015 which found that average household bills had risen 40% above inflation since 1989.
Water firms have also accrued £54bn in debt since privatisation – but paid out dividends to shareholders of £66bn, according to an analysis by The Guardian…
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