Labour should take lessons from the Netherlands, where public sector firms are funded by a state-owned bank

The private sector provision of water services in England is an oddity in the world: 90% of countries run state-owned operations. Even in Europe, it is the only country to have sold its water resources – including pipes, reservoirs, boreholes and treatment plants – to private owners, now mostly a collection of sovereign wealth, infrastructure and pension funds. The decision to put water – a natural monopoly – in private hands defied the Thatcherite logic of competition and efficiency. There was never any possibility of pitting rival companies against each other to raise standards. No other water supply is competing for a household’s business.

The result has been the creation of a series of sinecures upon which large firms and their executives stake their claims, protected from competition by legal rights over scarce liquid resources. The hundreds of thousands of pounds paid in bonuses to the bosses of Severn Trent and South West Water’s parent company, despite the companies pumping sewage into Britain’s rivers, seems a textbook example of rent-seeking by oligopolistic capital. Rather than invest in infrastructure to deal with a growing population, the country’s private water monopolies, which began life with no debt, borrowed £64bn over the past three decades and paid more than £78bn in dividends to their owners.