The entire water and waste sector was privatised 34 years ago under the late Margaret Thatcher’s Conservative government for £7.6bn. At the time, Mrs Thatcher wrote off the industry’s £5bn debt, leaving companies with a clean slate and gave them £1.5bn in public money.
The government had wanted to privatise the industry in 1984 but a public backlash against the plan saw it shelved until after the general election three years later. At the time, the UK was under pressure from Europe to improve the purity of its water.
However, meeting European standards would cost billions of pounds worth of investment which, it was hoped, would come from the private sector and, by extension, companies’ customers.
“If we want environmental improvement, it will cost money,” said Mrs Thatcher in 1988. “It will be the people who want those improvements in water who will have to pay.”
Former Labour MP Ann Taylor later said of privatising the water industry: “The message is always the same – maximise the cost to the consumer to ensure maximum return to the investor. We should not be surprised at that. After all, that is what private investors expect of their companies.”
