Big capital is demanding the government place Thames Water above the law

Big capital investment funds are asking the Keir Starmer-led government to place Thames Water above the law as part of a take-over deal.

The group of about 100 creditors, including BlackRock, Invesco and M&G, have asked the government to block legal action from campaigners:

There is high risk of campaigners/environmental interest groups bringing judicial review proceedings against any decision by the EA to relax or defer compliance obligations or agree not to prosecute the company for breaches of law,” states the creditors’ plan.

There is also a strong possibility of those groups supporting individuals with bringing private prosecutions against the company and/or its directors and senior officers. The risk of such action and its outcomes, which are evidently highly prejudicial to the sustainable recovery of turnaround water companies, can be significantly mitigated by clear government direction to the EA and the EA setting out a clear framework for prioritising environmental betterment over punitive enforcement (the latter having little or no positive environmental benefit).

These investment funds have loaned £13bn to Thames Water and now want to take control of the company. They are concerned the government may place it under temporary ‘special administration’, while potentially writing off a substantial amount of its debts.

Thames Water above all?

The Labour government is refusing to consider longterm public ownership of the industry. It even went as far as blocking the recent Cunliffe review of water from opting for public ownership as a solution. That’s despite the legal terms of ‘special administration’ meaning the government can bring the water industry into public ownership at zero cost. At the same time, we would save over £5 billion per year through removing profit from the utility.

On top of that, if the water industry was publicly owned, it would not need to rely on usury (expensive loans) from the private sector. Government borrowing has a lot lower rates of interest, while quantitative easing is another option.

‘How about the water industry is above the law?’

Big capital also pursued emergency legislation from the government to further protect their moneyed interest from public accountability. They want Ofwat fines for sewage dumping and illegal dividends to be cancelled.

In other words, they want Thames Water to face no repercussions for destroying the environment or for illegal profiteering. And they want to continue asset stripping while turning a public utility into a cash cow.

Cat Hobbs, founder of We Own it, said:

Brazen and outrageous demand from Thames Water’s creditors. They want protection from ever being taken to court by environmental campaigners. Steve Reed must say no and protect the public interest.

River Action UK said:

This is a direct attack on democracy. A brazen attempt to rewrite the rules, silence the public and protect polluters from accountability

Singer and prominent water campaigner Feargal Sharkey said:

Not only has Thames polluted our rivers, ram-raided bill payers’ bank accounts for cash, it is now attempting to undermine the very fundamentals of democracy: the right of free speech, to ask questions, to oppose and to demand justice. The government must stand up and oppose any attempt by Thames Water to railroad the British people. Being able to apply for a judicial review is one of the fundamental cornerstones of democracy. As a democracy, we are totally dependent on the ability of people to take the government and quangos to the high court to have that level of scrutiny from the judiciary. It’s a balance and check against abuse of power.

The very existence of private ownership of water is a scam. But this just takes the biscuit.

Featured image via the Canary