What sort of public ownership?

Water is essential for life. Provided by nature, it should be accessible and free for all. A functioning system for treating sewage is also one of the most basic requirements for any society; without it we face disease and contagion.

Yet, in the UK, one of the richest countries in the world, we see unknown quantities of storm waste and untreated sewage repeatedly dumped into our rivers, lakes and seas, turning them into open cesspits.1 They are not safe to swim in. It destroys the ecology. Just 14% of rivers and lakes, and 45% of coastal waters are assessed as meeting the minimum ‘good’ ecological status.2 

Since the 1989 privatisation of the water industry under Conservative Prime Minister Margaret Thatcher, the water companies have failed to invest, instead becoming fat on the revenues from consumers. English water companies upgrade only 0.2% of their assets each year.3 As a result, the present infrastructure is not fit for purpose.  

Government figures show that in 2022 there were a total of 301,091 raw sewage discharges from storm overflows into rivers and seas,4 an average of 825 a day. And that’s just the known figure, as many discharges are not monitored.  These discharges are not only in periods of heavy rain. They occur in dry periods as well. A fifth of our drinking water leaks out of the pipes due to underinvestment.

Water is a cash cow

Having bought a debt free industry in 1989 the companies have since accrued borrowings of £60 billion5 and have paid out an obscene total of £72 billion in shareholder dividends, money that could and should have been invested in improving the infrastructure and cutting consumers’ bills. It is estimated that between now and the end of this decade, a further £14.7 billion in dividends will be paid out,6 while customers will see their bills rise even more to pay for it. 

The industry’s trade body, Water UK, fronted by former Blairite cabinet minister Ruth Kelly, has pledged to invest just £10 billion to reduce (not stop) the outflows of raw sewage, which the companies will have to borrow. They will put the cost once more on the consumer. However, the government estimates that £56 billion needs to be invested to improve sewage outflows by 2050.

Neither the government nor the water companies are taking the dire situation seriously. All they care about is making as much money as they can. The industry is primarily a cash cow for its shareholders and, of course, for the big salaries of its executives. As with all such regulation, Ofwat has allowed the private owners of water to do what they want. The case for democratic public control, not superficial regulation, could not be clearer.7

Public support for public ownership

The idea of essential utilities and services being run in the public interest, rather than for private profit, is widely supported.  In October 2022, YouGov found that 63% supported water being in public ownership. Even a majority of Conservative voters believed that the utilities like water and energy should be run in the public sector.8

You would think, then, that Keir Starmer would want to keep the pledges he made when he stood to become leader of the Labour Party in 2020 – legacies from the Corbyn period. Starmer’s fifth pledge was, “Common ownership – Public services should be in public hands, not making profits for shareholders. Support common ownership of rail, mail, energy and water; end outsourcing in our NHS, local government and justice system.” The popularity of this, reflected in the YouGov poll, perhaps helps to explain the enormous support that Corbyn won.

Starmer, however, has ditched this pledge, along with others. He is determined to leave no trace of the Corbyn period. He is making the Labour Party a safe party for governing in the interests of big business, including those who profit from privatisation. Labour in government will extend the private sector further into the public sphere, especially into the NHS, creating new opportunities for profit for the capitalists. 

Corbyn the tinker man

It needs to be acknowledged that the Corbyn manifesto promises of 2017 and 2019 about water, energy, rail and mail were wholly inadequate. They were limited, partial, put off to some uncertain future date and destined to fail. The manifestos failed to identify the main problem as capitalism and its profit system. They aimed not to fundamentally challenge capitalism but to tinker with it here and there.

The introduction to the 2017 Manifesto stated, “Our entrepreneurs and managers are being held back from growing their business.” They are not ‘our’ entrepreneurs and managers; they exploit our class. It states, “Labour understands that the creation of wealth is a collective endeavour between workers, entrepreneurs, investors and government. Each contributes and each must share fairly in the rewards.” Again, this completely misunderstands that it is the workers who produce wealth, and profit for the bosses. We do not need entrepreneurs and investors; the majority, working class can decide democratically for itself how the resources of society should be organised. The owning class and the producing class have irreconcilable interests. The Labour Party cannot represent the interests of both. 

Nationalisation is not enough

While Socialists should champion the idea of public, or common ownership, and production for need not profit, and seek to build on the existing support for public ownership, a break from the old ideas of nationalisation is needed. 

Our aim is not to manage capitalism, as the 1945 Labour government did, or to make it more efficient, but to end it. Nationalisation by the existing state, whether it’s Conservative or Labour in government, will be nationalisation by the capitalist state, which is not a neutral actor in society but an instrument of minority capitalist class rule. We will still have the profit system. The major decisions about production will still be made in the company board rooms. Nationalisation within capitalism does not equal socialism, nor a step towards it. We need something much more fundamental. Rather than board room control we need genuinely democratic control and management of publicly owned services and industry, as part of an integrated democratic plan of production for need. All officials should be elected, accountable and subject to recall. 

Support for the public ownership of utilities and services such as water, energy, health and transport is perhaps explained by the fact that it is an obvious and common-sense approach to organising the provision of essentials upon which we all depend. But doesn’t this also extend to other sectors of the economy? 

The modernisation of the water infrastructure requires engineering, raw materials, building and excavating equipment. The same goes for construction of buildings, homes and public spaces. Food is as essential to life as water, yet we depend on the privately owned agri-businesses, the food producers and supermarkets, who adulterate our food with sugar, salt and other additives. Why should we leave our health in the hands of those who profit by turning us all into diabetics? The banking and finance sector is central to the economy, profiting at our expense. What about the pharmaceutical companies which make billions from producing medication needed by the sick?

All sectors, starting with the major companies who dominate production, should be brought into common ownership, without compensation. A socialist workers’ government would have to implement such a programme if it is to break the control of capital and remove exploitation of labour for profit. We need to aim for the abolition of capitalism entirely, with the creation of a new society based on the democratic shared ownership of the world’s resources, from the land and water to computer technology, with production planned to meet the needs of all, including the protection of the environment.

Unless the working class takes power from the capitalist class, and creates a new, completely different state, a truly democratic state, representing the interests of the working-class majority in society, we will still have a capitalist state, and it will be a capitalist economy, even if it runs some services or utilities in the public sector. Those services and utilities will remain prey for a return to the private sector in the future, as we saw with the nationalised sectors in the post war period being privatised under Thatcher and Major. 

We cannot proceed on the basis of partial measures, leaving capital intact. We need a fundamental break with capitalism. We need both a social and a political revolution; not just a change of government from one party to another, but a transfer of power from one class to the other – from the minority capitalist class to the majority working class. 

Of course, none of this can happen without the building of a mass socialist party, with an internationalist perspective, that has won the argument about the need for fundamental change within society, and which has the backing of the majority behind it, prepared to implement these steps in their own interests. That is the task before us.

In their ‘Manifesto of the Communist Party’, published in February 1848,9 Marx and Engels argued that, “the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery…Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.”

175 years later10 it is time we acted to remove the capitalists from every position of ownership and power. If they can’t look after our water, why would we trust them with anything else?

  1. https://www.ft.com/content/5c1a33e4-8939-11e9-97ea-05ac2431f453 []
  2. https://www.gov.uk/government/publications/state-of-the-water-environment-indicator-b3-supporting-evidence/state-of-the-water-environment-indicator-b3-supporting-evidence#surface-waters-ecological-and-chemical-classification []
  3. https://www.ft.com/content/3e6fae0a-22b2-4641-a209-41598713fbb0 []
  4. https://www.gov.uk/government/news/environment-agency-publishes-event-duration-monitoring-data-for-2022 []
  5. https://www.ft.com/content/81826b67-3d00-442b-9130-0c471be88247 []
  6. https://www.theguardian.com/money/2023/may/20/the-whole-thing-stinks-uk-water-firms-to-pay-15bn-to-shareholders-as-customers-foot-sewage-bill []
  7. There are some further useful facts and arguments here: https://weownit.org.uk/public-ownership/water []
  8. https://yougov.co.uk/topics/politics/articles-reports/2022/10/19/most-britons-believe-trains-water-and-energy-shoul []
  9. https://www.marxists.org/archive/marx/works/download/pdf/Manifesto.pdf []
  10. https://talkingaboutsocialism.org/the-communist-manifesto/ []

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