Ever since England and Wales’ water was privatised by Thatcher in 1989, Big Business has been making big money out of the monopoly of one of life’s essentials.

Last week investment Bank JP Morgan part purchased Southern Water. With a captive and always thirsty customer base of 6.6 million people, the company’s going to be raking in more than £1.5bn per year. During the first ten years of water privatisation profits rose by more than 160% – if you’d been flying high on the yuppie boom and invested £ 100 in Southern Water in 1989, your investment would be worth nearly £650 ten years later. Nice little earner! Meanwhile, proper investment in the infrastructure becomes unattractive and ’customers’ (they can just choose not to have running water if they don’t like it) are rewarded with ever deteriorating service and bills set to rise by a minimum of £15 a year, having already gone up more than 60% since privatisation.

Company bosses have argued that the increases were justified because of the improved service being offered. The Serious Fraud Office begged to differ after it’s investigation into the company. A policy of artfully concealing the true number of complaints it receives, pretending that its performance was a lot better than reality and adding a more positive spin to customer feedback were just three techniques being used to boost ‘shareholder value’. Shame they just couldn’t seem to find the cash to do anything about the 115million litres of water that are lost every day due to leaks. And SchNEWS is still waiting for them to improve water quality on Brighton Beach so we can do skinny dipping without getting ill! It’s been sixteen years since a European Directive meant the sewage works had to be upgraded to a decent level of treatment in the area.


The same share-boosting blags are at work in London too. Thames Water is facing a record £11m fine for misreporting regulatory required information. But still it’s worth it for Australian investors who last year bought it for £8bn, almost twice as much as the previous German owners, RWE, had paid only three years previously. And RWE had done their best to spend the cash – with the five-man board of directors receiving £20m in shares and salaries in 2005! And just why has a company that has missed its leakage targets

three years in a row being allowed to increase prices to consumers by 20 per cent?

Maybe the answer lies in the fact that global water company shares have posted better profits than Big Oil over the last three years, despite the boom in price of a barrel of black gold. The Bloomberg World Water Index of 11 utilities has seen 35 per cent a year growth since 2003 – a figure no doubt helped along by the 10% a year increase in bills for consumers.

In the countries of the south, the damage is even worse as poorer countries are forced to sell their water infrastructure as part of world trade agreements or IMF/World Bank loans. 22,000 people have their water disconnected every year in Johannesburg alone. With a population of 44 million people, almost one quarter have been disconnected at some time in a country where 43,000 people die of diarrhoea each year. At least that water company was supplying some people with water: in Tanzania they didn’t even get round to building any pipes while the UK’s own Adam Smith Institute were paid £35m for spin, including developing a propaganda campaign that centred around a pop video with the lyric "Our old industries are dry like crops and privatisation brings the rain!"


If you’re pissed off with this why not just not pay? By law they can’t cut your water off – all the water companies can do if you don’t pay is get a County Court judgement against you.

Mass non-payment has been a great way to deal with unfair charges; it saw off the Poll Tax. In Northern Ireland a successful campaign against the introduction of additional water charges has been running for two years. Currently water charges are paid through rates, but the Northern Ireland Assembly want to introduce a separate bill for water (like in England), but of course without any corresponding decrease in the rates!

The blatant attempt to tap the the public for a flood of filthy lucre did not go unnoticed by the great unwashed and a successful campaign saw the additional water bills postponed for two years, saving the average family £339. Despite many politicians declaring before the recent Assembly election that they were against the charges, the way water is rationed for cash is now ‘under review’ and the scheme continues to lurk as an option. More info

* See also SchNEWS 536

– from SchNEWS Issue 607, 19 October 2007