This article looks at the run-up to the privatisation of water and sewage services in the England and Wales in 1989. As is touched on in our article in the Overview section, the privatisation was different to many of the others in that water rates payers saw access to drinking water and sewage services as a right, not a commodity to be bought and traded to benefit share-holders. They were concerned that profits and pay would be the top concerns of private water companies, not the quality of the drinking water and the efficiency of the sewage systems.
The ten Regional Water Authorities were then placed under central government control using the National Water Council, a body created from the ten chairmen of each RWA and ten other people appointed by the government. The Council was responsible for water policy and enforcing regulations on water quality and water conservation.
This concentration of the control of water effectively laid the way clear for water to be privatised but whether the Heath government would ever have followed through is a moot point, since he lost the 1974 General Election after the 'Winter of Discontent'. Industrial action resulting in power blackouts and the imposition of a three-day working week to conserve power are largely credited with his downfall and Labour presided over power for the next five years.
Water rates payers' vociferous opposition to those 1984 proposals caused the plans to be put quietly aside. This was largely because of fears that the issue might cause the Tories to lose the 1987 General Election, but once Thatcher was reinstalled the wraps came off and within two years the privatisation of water had been concluded, to the dismay of many water rates payers.
The ten RWA's were converted into private companies with shares sold off to the public, as well as institutions, as a sop to compensate for water rates payers' eroded rights. Debts of over five billion pounds were written off and the new companies were given over one and a half millions pounds investment funding, all of it tax payers' and water rates payers' money.
The real reasons were to divest the government of the costs and responsibility of providing quality drinking water and sewage services. The sewers used largely the same Victorian infrastructure which would soon need massive investment to replace and the droughts of the early 1970s had shown that water conservation was about to become a massive headache.
Even the right wing national newspaper the Daily Mail, usually a staunch supporter of Tory policies, concluded in 1994 that water privatisation had become the biggest rip-off in Britain.
Utility Charges is sponsored by Purely Energy, who have funded a lot of our latest content. If you are looking for a low cost business energy supplier, take a look at their website.
