13 Aug 2026
Thames Water thinks you’re a fool. Even while the latest scandals break - they’ve paid their finance director £1 million, they’ve broken the law on pensions, they're asking to put up your bills AGAIN - they want you to buy their nonsense.
They’ve already put four offers on the table, starting with an offer to illegally pollute until 2040, all rejected by the government. But they want to control the narrative, so that new Prime Minister Andy Burnham gives in, instead of standing up for the public (like he did when he fought successfully against the private bus companies in court to set up Manchester’s BeeNetwork).
So collapsing, disgraced Thames Water has commissioned Frontier Economics to warn you off the idea of public ownership for the whole of the English water sector. You are paying for this PR with your bills if you’re one of the 16 million households in the Thames Water area. Here’s what they don’t want you to know.
1) Thames Water’s debt can be cut drastically.
Frontier Economics recognises this in their report out this week “We note that in the case of financially distressed companies, debt may have a market value below carrying value and may trade at a discount.”
Damn right it does. Thames Water is itself a seriously financially distressed company. The government should take it to the cleaners. The Conservative government planned for Thames Water’s debt to get a “haircut” of at least 40% if the company went bust. A few years and a lot of bailing out later, the government should be pushing for a maximum haircut, standing up for households and the public like the Blair government did when Railtrack went bust.
2) Thames Water can be taken into public ownership without compensating shareholders, using the special administration regime that exists for companies that go bust (or fail to fulfil their duties) because it has gone bust.
As Frontier Economics itself says: “Nationalisation, other than through a special administration regime (SAR), would require primary legislation and compensation to investors.” Exactly. Other than special administration - but Thames Water already meets the criteria for special administration, so no legislation is needed. Andy Burnham can withdraw Thames Water’s licence.
3) Buying an asset with a revenue stream means you get an asset with a revenue stream. Frontier Economics recognises this, saying “it could be argued that, from a balance-sheet perspective, nationalisation could be close to net neutral (as the government would issue debt to pay for an asset: the rights to an income stream from bill-paying water and sewerage customers)” before saying that government debt isn’t currently treated this way. But every country in the EU does treat debt in this way.
Every English household is paying more to privatised water companies just to conform to this arbitrary Treasury rule decided by UK officials. A third of every bill is spent on dividends and debt. Choosing to continue with wasteful privatisation will cost households £22 billion extra over the next five years - a cost of living burden which doesn’t show up on government “fiscal” accounts.
Public ownership would save £3 to £5 billion a year that could be used to cut bills, invest in infrastructure or both.
4) Since privatisation in 1989, the privatised water companies have extracted £85 billion net out of the system, they haven’t invested. Every penny of investment has come from your bills and they’ve also racked up a debt mountain of over £60 billion at your expense. This is what happens when you hand out natural monopolies and essential assets to shareholders around the world. Government doesn’t need to be afraid of losing interest from these “investors”. (Indeed, the Good Growth Foundation has recently pointed out that Thames Water shareholders have largely written off their stakes but have continued to invest elsewhere in the UK.)
The government should be regulating the private water companies out of existence, forcing them to put their lack of investment on the balance sheet as liabilities, as suggested by Feargal Sharkey. Don't allow them to increase bills again. When they fail to fulfil their statutory duties or go bust, take them into special administration.
5) Thames Water has been in breach of its licence conditions for since July 2024 when it RAN OUT OF MONEY - so Andy Burnham can take it back. He can and must withdraw Thames Water's licence IMMEDIATELY by taking it into special administration, as supported by MPs across party lines. As mentioned above, the shareholders would get nothing, the creditors would get a serious haircut and the debt would be refinanced more cheaply in public hands to reduce the burden on households.
It ought to be astonishing that this company which has gone bust is spending money from your bills on a report about the water industry as a whole. The Frontier Economics paper as a whole is simply a recycled version of Defra’s ‘it will cost £100 billion’ lie. It explicitly uses the same research methodology which has been discredited thoroughly, by the People's Commission on the Water Sector, Professor Ewan McGaughey for Common Wealth and others - see this useful summary from River Action.
If you’re a Thames Water customer (using the word lightly, as you have no choice), they want you to think you have to accept their shoddy service and prop them up with bailouts - today they want to increase your bills yet AGAIN after a 40% increase last year. If you’re a customer (again, not the right word) of another privatised English water company, Thames Water wants you to accept a new low standard on sewage they would like to impose on the whole of England through the environmental “leniency” they’re repeatedly demanding from the government.
Who’s “they”, exactly? It’s not the shareholders, who under our privatised system are the legitimate decision makers. No, in Thames Water the shareholders have walked away. The company has gone bust, after all. Charlie Maynard MP has pointed out that this raises the important question of who is actually in charge, who is the "Ultimate Controller" of the company, and are they appropriate decision makers?
In practice, “they” are an unaccountable group of US hedge funds who want to profit from their investment into Thames Water’s dodgy debt and then sell the company when they’re done. “They” include Paul Singer, a man who is well known for trying to scare governments into submission when they stand up for their country’s interests.
In the US, water is 87% publicly owned. But these hedge funds want to profit from our absurd system here in England, and we’re letting them.
Keir Starmer’s government let this s***show rumble on. But Burnham was powered to number 10 by a promise to do things differently and a critique of 40 years of privatisation. He should say no to any new bill increases. He should insist on all privatised water companies fulfilling their duties with no new money. And he should take back Thames Water TODAY.
