Keir Starmer on Channel 4’s Sunday Brunch, May 2024. Keir Starmer on Channel 4’s Sunday Brunch, May 2024. Photo: Keir Starmer / Flickr / CC BY-NC-ND 2.0

The demand for the renationalisation of water is deafening, but Starmer can’t hear it, writes John Westmoreland 

The privatisation of Britain’s national utilities by Margaret Thatcher’s Conservative governments served just one purpose – to massively increase capital accumulation for the capitalists, by transferring wealth from the working class to those at the top. 

The attack on trade unions, the welfare state, civil liberties and the rest served to prop up the central objective of capital accumulation. Since then the rich got ever richer, and… well, you know the rest. 

Thatcher privatised the water industry in 1989. Looking back to what Thatcher promised then, from where we are now, the lies and deception used to justify privatisation are nothing short of shocking. 

Thatcher had been in office for ten years, but claimed that the water industry was in chaos, citing crises with which we are all too familiar. Lack of investment could only be the fault of government policy, but nevertheless, Thatcher claimed that privatisation would see private companies ride to the rescue and bail out the nine regional water authorities. Water would be cheaper and cleaner. 

The environmental decay inherent in capitalism was also going to magically transform. Thatcher gave a list of polluted and unsafe beaches, dead rivers killed by sewage leaks and a water supply network that was falling apart, water mains bursting and leaking and workforce unwilling to put it right. The very things that are causing the general public to call for renationalisation today.  

A 2022 poll showed that 63 percent of the public want to see water renationalised, with just 8 percent believing in continuing with privatisation and 14 percent favouring both. 

Investment sham 

Thatcher’s promise that privatisation would see water supply get transformed by the private sector was a straight-up lie. Investment today is down on investments in 1990. As investment has declined, bills and shareholder dividends have risen, along with pay for CEOs. 

When the water companies were sold off the existing debt held by the nine water authorities was retained by the government, so the private companies began life with zero debt. Since then, water companies have recorded debts worth billions of pounds. Thames Water, for example, now has a debt of more than £15bn and no intention of paying it. The money, as far as they are concerned, will come from the government or bill payers.  

But while the debt mounts for us, the shareholders are making record profits. Ofwat has just imposed a £40m penalty on Thames Water for paying out £37.5 m to shareholders when the company was in crisis. 

And what about all that stuff about clean rivers, courtesy of privatisation? The Rivers Trust  is reporting that our rivers are among the most polluted in Europe: 

‘Our rivers are in a dire state and: no single stretch of river in the UK is in good overall health; and, toxic chemicals that remain in ecosystems for decades pollute every stretch of English rivers.’ 

Water companies that have vented millions of litres of untreated sewage into our rivers need to be held to account. One of our most popular rivers, the Wye, is virtually dead because of the high level of nitrates that have been allowed to pollute it. And when water company bosses are creaming off millions in bonuses we have a right to demand renationalisation without compensation. 


The case for renationalisation is glaringly obvious. It would end corrupt business practices and put the responsibility on the government to look after our water requirements. Renationalisation is not only practical; it is also popular. It should be a no-brainer, but think again. 

Keir Starmer has been under pressure from Labour backbenchers, who are respectfully asking that an incoming Labour government grasps the nettle and goes for the renationalisation of all the water companies. But he’s not having it. Rachel Reeves snapped out a clear line against renationalisation on the grounds that the City wouldn’t like it: 

‘Within our fiscal rules, to be spending billions of pounds on nationalising things, that just doesn’t stack up against our fiscal rules.’ 

Oh dear! We know Rachel and Sir Keir like to bathe in fiscal responsibility but the rest of us have to make do with water – one of Rachel’s ‘things’. And we don’t want to pay for renationalisation either. Our utilities were sold without our consent and have been pillaged ever since. In capitalist language they are market failures and deserve to go down the plug hole along with the sewage they were supposed to treat. 

The tin ear of Starmer and Reeves can’t just be explained by their cringing servility to the Treasury, though. The case for renationalisation involves looking at the core reason that our national utilities were privatised in the first place – capital accumulation by the transfer of wealth from those at the bottom to those at the top.  

Starmer’s fiscal responsibility involves keeping the lid on the whole dirty business of privatisation. Renationalisation would be suggesting Thatcher may have got it wrong, that privatisation wasn’t a solution, it was theft. And that is why we are never going to stop demanding it. 

Renationalisation is one part of our plan. We need to redistribute the ill-gotten gains of the privatisers back to working people. And that in turn will mean using our collective strength to bring it about.  

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John Westmoreland

John is a history teacher and UCU rep. He is an active member of the People's Assembly and writes regularly for Counterfire.