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Arguments for socialism :: Nationalisation
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I was recently astounded to learn from the GMB union's 'Take Back the Tap' campaign for renationalisation just how much of a rip-off water privatisation has been.
It references a study by the National Audit Office which found that water bills had risen by 40% above inflation since Thatcher privatised the water industry in 1991.
According to the GMB campaign, a staggering 2.4 billion litres of water were wasted through leakage by the nine privately owned water and sewerage companies daily from 2016 to 2017. In other words, over 900 Olympic-sized swimming pools every single day!
At the same time, water companies are building up huge debts to finance shareholder dividends. A recent report from the University of Greenwich found that £47 billion debt has accrued due to £50 billion in shareholder pay-outs.
Therefore the debts accrued to meet the shareholder dividends are being paid directly by the consumer, while no real investment is made in the ageing infrastructure!
In his 2017 manifesto, Jeremy Corbyn put forward the highly popular policy of extending public ownership in utilities, including water.
He proposes doing this by establishing small municipal utilities to compete with the giant multinationals, and buying the shares of some existing companies, or issuing government bonds in exchange for them.
This is not full nationalisation, and would not give a left government proper control of utilities. Even so, the capitalists are frightful at any prospect of losing such a lucrative cash cow.
So, in anticipation of a Corbyn government, Thames Water has already taken action to erect legal and financial barriers.
Bosses have added a clause to outstanding bonds ensuring lenders are paid back immediately should the company be nationalised.
Labour estimates water nationalisation would cost £20 billion - half the market value of the firms. The Social Market Foundation, a right-wing think-tank, put the cost at £90 billion - double the market value!
Clearly the water bosses will not accept a dent in their profits. They will expect full support from the Blairites in the Labour Party, along with other capitalist representatives, in trying to stop the 2017 manifesto becoming a reality.
However, if pressure from workers' struggle means it does, the bosses will look for compensation for what amounts to their gross failure in charge of our water industry.
It is urgent that the water sector and all utilities are fully nationalised, under democratic workers' control and management.
However, this should be done with compensation paid only on the basis of proven need. We should not be compensating the extremely wealthy for profiting from our water misery.
At the same time, it will be essential for the working class to fight for the immediate implementation of wider socialist policies, including nationalisation of the banks, large building firms, and top corporations which control our economy.
Only this can allow funding and coordination of production, infrastructure and public services to truly meet all our needs.
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Article dated 8 May 2019
The Socialist, weekly newspaper of the Socialist Party
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