MAKERFIELD — Greater Manchester Mayor Andy Burnham called for the public ownership of Thames Water. Burnham, the Labour party candidate in the Makerfield byelection scheduled for 18 June, said public ownership is an option.
"Public ownership is absolutely an option. I would say for Thames Water, that is what should be done." Burnham said. He also proposed prohibiting water bill increases by cancelling shareholder dividends when bills exceed a specific threshold. "I think what we have to do is draw a line and say that the public interest has to predominate now over the private interest." Burnham said.
Burnham has met with water sector campaigners, including former musician Feargal Sharkey. Sharkey, lead vocalist for the band the Undertones, has been critical of the current situation. "Two years later and nothing but stagnation, futility and non-delivery." Sharkey said. He also stated, "If the party does not get a grip on this issue, then I am not sure the party has a future."
Privatised water companies in England have been linked to the pollution of rivers and seas. Insufficient infrastructure investment by water companies has contributed to recent water shortages. Thames Water, which was privatised during former Prime Minister Margaret Thatcher's tenure, provides water services to approximately 25 percent of the population in England. Private equity firms have accumulated approximately £20 billion in debt for the company, and financial assessments indicate it is approaching financial insolvency.
The government is currently evaluating whether to place the company into special administration. A creditor proposal would cancel up to £1 billion in fines related to illegal environmental pollution and would grant partial ownership to investor Paul Singer. The government has declined to nationalise the water sector, citing high implementation costs of £100 billion in creditor and shareholder compensation. Water services operate under public ownership in Scotland, and the sole water service provider in Wales operates as a not-for-profit entity.
The government introduced legislation to prohibit bonus payments to chief executives and chief financial officers at struggling water companies. Such legislative provisions previously permitted senior executives to receive large bonus payments despite high pollution levels. The government also announced it would pursue imprisonment for water executives only if they fail to cooperate with Environment Agency investigations. Sharkey advocated for criminal penalties against water company executives who engage in repeated illegal pollution. Burnham supported this position, stating, "I certainly would support the point about bonuses in terms of criminal consequences for people who fail to deal with sewage and the spills that we have seen."