Of all the signs that Britain is sleepwalking into a new dark age, the collapse of Thames Water must be the most pungent. Here we have a utility, a monopoly provider of clean water and sewage services to 15 million people, now teetering on the brink of nationalisation. The company has amassed debts of £14 billion, leaks a third of its water through Victorian-era pipes, and pays its executives millions while shareholders pocket dividends. The government now faces a choice: let it drown or bail it out. But let us not pretend this is a crisis of finance. It is a crisis of character.
We have been here before. In the 1850s, London’s river Thames was a cesspool, and cholera outbreaks killed tens of thousands. The cause was not nature but neglect: private companies had built a chaotic, unequal system that served profit, not people. The solution came from a Conservative government under Lord Derby, which created the Metropolitan Board of Works and funded Joseph Bazalgette’s magnificent sewers. It was a moment of civic pride, of long-term thinking, of national identity. Today we have the opposite. We have a system designed by the Thatcherite revolution to turn water into a commodity, complete with private shareholders and regulatory capture. The result is not efficiency but decay.
Consider the intellectual decadence that permits this. Our elites, from the boardroom to the Treasury, have convinced themselves that markets solve everything. They privatised water in 1989 because they believed competition would follow. It did not. Ofwat, the regulator, has spent 30 years setting price caps that reward debt-fuelled payouts and punish investment. The result: a company that spends more on servicing debt than on fixing leaks. This is not a failure of capitalism. It is a failure of imagination. We have forgotten that some things are not for sale: clean water, national security, the rule of law. Or rather, we have sold them and now we complain about the price.
But let us be precise. The bailout looms because the alternative is worse: a disorderly collapse that would leave millions without water, poison the rivers, and cost the taxpayer even more in emergency measures. The government will step in, just as it did for the banks in 2008. But here is the rub: a bailout without reform is just a gift to the bondholders who lent Thames Water money at high interest rates. It is a transfer from the poor to the rich, from the taxpayer to the speculator. If we are to nationalise the company, let us do it properly. Let us break it up, write down the debt, and run it as a public service, not a Ponzi scheme.
Yet I doubt we have the stomach for it. Britain’s political class, whether Labour or Conservative, is addicted to the myth of private efficiency. They will baulk at the cost, the disruption, the ideological heresy. So they will offer a sticking plaster: a loan with conditions, a regulatory tweak, a promise to review. And the crisis will return, because the rot is cultural. We have become a nation of short-termers, of asset-strippers, of dividend-maximisers. We have forgotten how to build things that last. The Victorian sewers lasted 150 years. Our water companies cannot last 30.
So here is my modest proposal. Let the bailout come. But let it come with steel and flint. Nationalise the assets, but not the debt. Appoint a public authority with a mandate to invest, not return. And then, when the taps run clean again, we might ask ourselves: what else have we privatised that we should have kept? The railways? The energy grid? The BBC? The list is long. The price of decadence is always paid by the poor. And the Thames is rising.
