The Independent London Newspaper

 

FORUM: Bursting pipes and ballooning profits

George Binette

The ‘Angel Tsunami’ was one of three floods in London within days. They have one common denominator – Thames Water, says George Binette, above. Below: Flooded gardens in Devonia Road, Angel. Picture: Polly Brown

 
Devonia Road flood

Published: 16 December, 2016
by GEORGE BINETTE

BY Sunday afternoon this London street scene was becoming familiar: thousands of gallons gushing from a burst pipe, firefighters wading through thigh-deep waters and dozens of emergency vehicles dotting surrounding streets as a rescue helicopter whirred overhead. Cars and buses ground to a halt across a half-mile radius. 

This time, the chaos unfolded near Northwold Road and Stoke Newington High Street, and my friends, Louise and Harry, found themselves stranded on a sunny Sunday afternoon four floors above the deluge while neighbours below left their flats in inflatable rafts. By unhappy coincidence, they’ve also faced much longer journeys into work due to the ongoing repairs south of Islington Green in the wake of the first of three major flooding episodes in the space of seven days across the capital. 

The Stoke Newington flood came just a day after a burst main had unleashed a torrent of floodwater in Blackheath, south-east London, and less than a week after another three-foot pipe burst, forcing scores from their homes in N1.

Inevitably, a blame game ensues. Louise, Harry and other N16 residents insist they reported a leak to Thames Water five days before the main burst. Tens of millions in insurance claims will follow involving residents and small business proprietors. 

Questions will arise about the cost to the public purse of quite literally bailing out residents when the firm ultimately responsible for the maintenance and repair of the capital’s water and sewage network is a profitable private company.

There is, of course, a common denominator between the three significant flooding incidents across the capital between December 5 and December 11, and it’s not simply the allegedly clapped-out Victorian era infrastructure. It’s Thames Water. This giant utility emerged from the privatisation of 10 regional water authorities across England and Wales in the twilight of the Thatcher government. Prior to hiving off the public assets, the government wrote off nearly £5billion in debt.

More than 25 years later and what is now Thames Water Utilities Ltd ‘belongs’ to assorted pension and infrastructure funds. By far the biggest player, with 26 per cent of all shares, has been Macquarie, a Sydney-based financial services corporation, which pundits have dubbed the “vampire kangaroo”.   

According to the credible website, thisismoney.co.uk (May 26, 2016), since Macquarie’s de facto takeover Thames Water managed to pay all of £100,000 in tax on profits estimated at some £1.2billion in the decade between 2006 and spring 2016 when it initiated a sell-off of its stake in Thames. 

In 2013, despite a turnover of £1.8billion, Thames paid – apparently quite lawfully – not a penny in corporation tax. Meanwhile, Thames’s estimated debt has soared from £1.6billion to £10billion.

The case of Thames Water seems a prime example of what economist Mariana Mazzucato has described as “increasingly parasitic relationships in which corporations have socialised risk and privatised rewards”. Macquarie has appeared keen to dispose of its Thames shares, but worry not since it is set to clamp its predatory paws on four of the regional gas supply networks just sold by National Grid, including one which covers north London.

With rich irony, official Thames Water emails proclaim: “We provide the essential service that’s at the heart of daily life.” Surely, the time has come for Labour to campaign not only for the renationalisation of the railways but the return of this “essential service” to democratically accountable public ownership.

George Binette is secretary of Camden branch of Unison and a member of Hackney North Constituency Labour Party. He writes in a personal capacity.

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