Thames Water should be nationalised, says Andy Burnham

Exclusive: Labour’s Makerfield byelection candidate advocates public ownership of water companies as he prepares for potential leadership bid

Thames Water should be nationalised, Andy Burnham has said, revealing public ownership of water companies would “absolutely be an option” under his potential leadership of the Labour party.

Burnham, Labour’s candidate in the Makerfield byelection, has previously called for “greater public control” over the companies. In an interview with the Guardian, he has confirmed this could mean nationalisation.

“Public ownership is absolutely an option,” he said. “I would say for Thames Water, that is what should be done.”

The Manchester mayor has been sharpening up his offer to the country in preparation for a leadership election, should he win on the 18 June. The Guardian understands he has met water campaigners including the former Undertones frontman, Feargal Sharkey, who is an outspoken advocate for nationalisation of water.

Privatised water companies in England have presided over widespread pollution of the rivers and seas, while failing to invest in infrastructure that has contributed to recent water shortages. Many of the companies have been loaded with debt, while shareholders have been paid billions in dividends. In Scotland, water is nationalised, and in Wales the sole water company is not for profit.

Thames Water is England’s largest, serving about a quarter of the population. Since the company was privatised under Margaret Thatcher, the successive private equity firms that have owned it have drowned the company in about £20bn of debt, and it is now close to collapse.

The government is deciding whether to take it into special administration, a form of temporary nationalisation, or accept a deal offered by its creditors that would write off up to £1bn in fines for illegally polluting the environment. If the government signs off on the deal, the company would be part-controlled by the billionaire Trump donor and hedge funder Paul Singer.

Burnham said: “If you look at the situation that we have here in the Makerfield constituency, people have recently experienced hefty hikes in their bills. The profits of the water company have almost doubled, if not doubled. If you look at water as an industry as a whole, it’s run predominantly in the private interest rather than the public interest, or in other words, it’s an industry where the shareholders can never lose and the bill payers never win.” Makerfield is served by United Utilities, one of the worst-polluting companies in the country.

The Greater Manchester mayor has also proposed banning bill rises by cancelling the dividends of companies that raise bills over a certain level. Burnham said he would fund this by “running the industry differently”, adding: “And you prevent the excessive profiteering out of water, which we’ve now seen over many years.”

Keir Starmer promised during the 2024 election campaign to “end the Tory sewage scandal” and clean up the water companies, but progress has been slow. Ministers have declined to nationalise the sector, claiming it would be too expensive and have instead spent almost two years consulting on a new regulator for the water industry. This regulator will not be in place until 2029 – the end of Labour’s term.

The government also attempted to ban chief executives and chief financial officers of failing water companies from being paid bonuses, but loopholes in the legislation have meant they have still been paid millions despite record sewage dumping. Burnham said he would “certainly support” banning bonuses of the entire leadership teams of water companies rather than just the CEOs and CFOs.

Sharkey, who campaigned for Starmer in 2024, has been disappointed by the lack of action. During the general election campaign, the prime minister promised to “end the Tory sewage scandal”.

Sharkey said: “If the party does not get a grip on this issue, then I am not sure the party has a future.” He has not been impressed with Starmer’s record: “Two years later and nothing but stagnation, futility and non-delivery.”

The government has defended its reluctance to nationalise water, arguing it would cost £100bn to compensate private-sector creditors and shareholders, and take it under public control. Experts have disputed this figure, arguing ministers would be legally entitled not to compensate creditors at all, given the financial state of the company and how much they have already made in profits.

Burnham appeared to agree with Sharkey. He said: “The great Feargal Sharkey is perhaps the most prominent voice on this matter. He has identified the billions and billions and billions that have been siphoned out of the water industry without that money going back into the infrastructure, and actually you can draw a parallel with the railways, with energy.

“We’ve allowed this to happen in this country over four decades, where a small number of people have made a lot of money out of these services, when the vast majority have been left paying more for a poorer service.”

Sharkey has also called for criminal consequences for the chief executives of water companies who repeatedly illegally pollute. The government has said it would jail water bosses, but only if they fail to comply with Environment Agency investigations, rather than for the pollution itself.

Burnham said: “I certainly would support the point about bonuses in terms of criminal consequences for people who fail to deal with sewage and the spills that we’ve seen … If people wilfully ignore their responsibilities, well, they should face serious consequences.

“The public are rightly furious about this situation. I think what we have to do is draw a line and say that the public interest has to predominate now over the private interest.”