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Thames Water is reportedly on the brink of collapse. The UK’s largest water company, well known for its high levels of water leakage, sewage spills, executive pay and dividend payments, now appears to be flooded with debts that it cannot afford to pay.
Those debts have reached more than £14 billion, leading to fears the government – or UK taxpayers to be precise – may have to bail the company out.
The news of Thames Water’s difficulties may have shocked some of its 15 million customers. But as someone who has researched the finances of water companies, I was not entirely surprised. These issues have been a long time in the making, and I raised concerns publicly over five years ago.
When the water and sewage companies of England and Wales were privatised in 1989, the intention was to bring fresh finance and innovation to create efficiency. But in the 2000s, a new kind of financial investor began to dominate the sector.
Our recent research found that by 2021, of 15 English water and sewage companies, nine were owned by “special purpose companies”. These are organisations set up for the purpose of buying water utilities, with owners consisting of a range of private equity funds, pension funds and sovereign wealth funds.
These kinds of investors were then able to use water company revenue to generate significant returns to shareholders. And one way this happens is by hiking up company debts.
Newly privatised water companies had started out with zero debt in 1989. Yet by the end of March 2022, total debt in the sector was at £60.6 billion. In part, the increased debt was used to refinance the companies so that investors could repay themselves part of the original cost of buying the water utility.
Our research shows that Thames Water was the archetype of this model. When it was taken over in 2007 by a consortium led by Macquarie, an Australian investment bank, debts increased over the next ten years from £3.2 billion to £10.7 billion. The proportion of assets funded by borrowing increased to over 80%, while the company paid out dividends of £2.5 billion. The company has previously said that it has a “strict, performance-linked dividend policy monitored by Ofwat”.
But such high debts are problematic for a water company. First there is the issue of inequality, where customers’ water bills are used to pay down debts that have increased to pay dividends to its owners. And second, as we see with Thames Water, these highly indebted companies are potentially unstable in the event of cost pressures.
What we have now is a perfect storm in which Thames Water’s finances may collapse. A key pressure is inflation, which is pushing up the value of some of the company’s debt at the same time as it pushes up costs. More than half of Thames Water’s debt is linked to inflation, contributing to the uplift in debt value.
Then there is the cost of improving performance. This has become more urgent after Ofwat, the water company regulator, was given new powers (effective from April 2025) to prevent companies paying dividends if these weaken financial resilience or are not linked to performance.
In 2022, the government set out a plan to tackle the rapidly growing issue of sewage discharge in a £56 billion investment plan. All of this adds up to intense pressure on the company’s finances.
If those finances do unravel, it is likely that the company will be underwritten by the government to keep the taps flowing while a rescue package is put together (as happened with the energy company Bulb).
However, this situation also creates the opportunity for a new public model of water supply, one that treats water not as a private commodity but as part of the wider ecosystem, providing social equity as well as environmental sustainability.
Public ownership need not be a step back to the 1970s. In fact, it would bring the UK into step with most of the modern world, including most of Europe. In Paris, where water provision was made public in 2009 after years of outsourcing, the change is widely considered a success story.
The last 34 years have revealed the fundamental problems with the current system. This crisis is a chance to direct England’s water in a new direction.
Kate Bayliss does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
One year of war and Russia is still mired in its second invasion of its neighbour’s internationally recognised territory – which turned out to be much bloodier and more devastating than the first due to Ukraine’s incomparably stronger resistance.
The war’s international dimension has been dramatically emphasised by the recent visit by US president Joe Biden to a country where there is no concentration of US troops. Nato countries are increasing their support to Ukraine despite all speculation about fatigue settling in among them.
And Beijing is about to submit a peace plan, duly consulting Moscow beforehand – since they are supposedly bound by “limitless friendship”.
Since Vladimir Putin sent his war machine into Ukraine on February 24 2022, The Conversation has called upon some of the leading experts in international security, geopolitics and military tactics to help our readers understand the big issues. You can also subscribe to our weekly recap of expert analysis of the conflict in Ukraine.
Vladimir Putin’s recent speech offered no perspective of peace, instead blaming the west for the conflict: “They [the west] started the war. And we used force and are using force to stop it.”
To help understand how the world reached this dangerous juncture – and to reach as fair as possible a judgment about it – we need to first consider the historical perspective. There are basically two conflicting descriptions of the chain of events leading to the Russian invasion of Ukraine on February 24 2022.
One description – we shall call it the pro-Russian version – presents that invasion as Moscow’s reaction to three decades of US-led western encroachment into its former sphere of domination, as part of a US drive to global hegemony.
The two major rounds of Nato’s eastward enlargement were perceived by Russia as hostile and provocative gestures. All the more so since Russia itself was never invited to join the alliance whose raison d’être has precisely been to counter it after the second world war. Poland, Hungary and the Czech Republic were admitted as Nato member states in 1999 against the backdrop of the first US-led war since the end of the cold war that circumvented the UN security council, thus violating international law: the war in Kosovo.
Six more states formerly dominated by Russia were integrated into Nato in 2004 (along with a seventh that belonged to former Yugoslavia). They included three former Soviet republics – the three Baltic states: Latvia, Lithuania and Estonia. The backdrop this time was the US-led invasion of Iraq that had started the year before, circumventing the UN security council one more time and constituting yet another Washington-led violation of international law.
The previous year, George W. Bush unilaterally scrapped the anti-ballistic missile treaty to Moscow’s great discontent. So, when he insisted at Nato’s Bucharest summit in 2008 on promising membership to Georgia and Ukraine, Vladimir Putin felt prompted to act before Russia found itself sharing a long border with a hostile North Atlantic alliance.
Events in Georgia in 2008 and Ukraine in 2014 were the consequence of this. Putin eventually ordered the invasion of Ukraine in a (failed) attempt to achieve “regime change” in that country like the US had tried and botched in Iraq.
The opposite description – we shall call it Nato’s version – portrays Russia’s invasion of Ukraine as the child of Putin’s delusions of grandeur and his ambition to reconstitute the imperial domain of tsarist Russia and the Soviet Union.
Since becoming Russia’s president at the turn of the century, Putin has gradually increased the concentration of power into his hands and become more and more authoritarian. This process accelerated after his comeback to the presidency in 2012, after the interim period during which he was formally replaced in that role by his stand-in Dmitry Medvedev, while continuing to pull the strings from the prime minister’s seat.
Confronted with massive opposition to his return, Putin felt threatened by the prospect of a western-sponsored “colour revolution” against his rule. He invaded and annexed Crimea in order to boost his legitimacy, knowing how popular that annexation would be in Russia.
His success in this endeavour and the relative moderation of western reaction – along with the effect of his protracted self-isolation for fear of catching COVID – led him to envisage a further step in pandering to Russian nationalism by subduing Ukraine. He tried to achieve this by invading it and has so far failed miserably due to the country’s resistance exceeding all expectations.
Which of these two narratives is right? The objective answer to this question is: both. They are both true and there is no contradiction between them – in fact, they fully complement each other. That is because Washington’s post-cold war behaviour provided the perfect conditions for the growth of Russian revanchism that Vladimir Putin came to embody.
Where does the recognition of the above two sets of facts leave us regarding the continuing war? There is no doubt that the main responsibility in the present tragedy falls on Russia. Its invasion of Ukraine was unprovoked and openly premeditated.
Presuming that Putin had believed that most Ukrainians would welcome his “special operation”, he should have cancelled it and withdrawn his troops as soon as it became clear that he was mistaken. Instead, he got his country’s military bogged down in a long murderous and destructive war in eastern Ukraine.
Russia must withdraw its troops to where they stood before February 24 2022. As for Crimea and those parts of Donbas that were controlled by Russian-backed anti-Kyiv forces since 2014, their status should be settled by peaceful and democratic means compatible with the UN Charter, along with the deployment of UN troops in the disputed territories.
The world cannot afford a new world war in order to reinstate these rules. The new cold war, launched by Washington less than a decade after the end of the first one and now embodied by Russia’s murderous invasion of Ukraine and by perilous sabre rattling around Taiwan, must end before it leads to Armageddon.
Gilbert Achcar's latest book: The New Cold War: The US, Russia and China from Kosovo to Ukraine is published by The Westbourne Press.
Vladimir Putin’s decision to pull out of the New Start nuclear weapons treaty with the United States will have predictable responses.
Stocks in defence corporations will rise at the prospect of new markets for nuclear missiles. Disciples of deterrence will reassure the public that arms control was never really needed. Those who fear the end of the world as we know it will sound the alarm – playing into Putin’s hands, some will say, by causing alarm and weakness in the west.
Others may point out that the US and Nato have such technical and financial dominance that Putin is damaging his own interest by giving up controls. On the contrary, leaving Russia unconstrained to attach comparatively cheap and terrifying nuclear weapons to any aircraft, vessel or missile will be a nightmare for deterrence planners.
The new strategic arms reduction treaty was the latest in a series of agreements stretching back half a century between the US and Russia (and before, the USSR) on their nuclear weapons. The treaty limits each state to no more than 1,550 nuclear weapons fitted to up to a total of 700 missiles and aircraft.
There have been no limits on anti-missile missile systems since 2002 when the US ended an agreement on these. This is one factor motivating Putin to abandon controls on missiles as US defences improve along with conventional strike missiles.
New Start includes provisions for each side to inspect the other’s weapons to verify the agreement is working. And, at present, neither the US or Russia are accusing the other of violations.
Since Vladimir Putin sent his war machine into Ukraine on February 24 2022, The Conversation has called upon some of the leading experts in international security, geopolitics and military tactics to help our readers understand the big issues. You can also subscribe to our weekly recap of expert analysis of the conflict in Ukraine.
The types of missiles and planes governed by New Start can carry thousands more weapons than they do at present. Back in the 1970s, nuclear bombs were routinely as small as 10cm in diameter so that large numbers of multiple independently targetable reentry vehicles could be fitted to a single missile.
It was the prospect of unlimited production of such weapons that concentrated the minds of US and Soviet decision makers to realise that they had a collective interest in limits.
From the Russian perspective, ending New Start is a natural result of failing to get US agreement on missile defences and conventional strike weapons.
One treaty in particular has shown the value of disarmament during the Ukraine war. It might be surprising given the bombardments of Ukraine, but the 1987 intermediate-range nuclear forces (INF) treaty has denied Russia thousands more missiles that it could have used.
Read more: Ukraine war: how Gorbachev's 1987 INF missile treaty has limited the arsenal available to Putin
Thanks to the agreement struck by Ronald Reagan and Mikhail Gorbachev, leaders of the US and USSR respectively at the time, Russian forces attacking Ukraine have not been able to use ground-to-ground ballistic and cruise missiles with ranges from 500km to 5,500km.
The treaty was actually cancelled by Donald Trump in 2019. But only one Russian missile type that apparently violated the treaty – the 9M729 – exists. And as it has a nuclear-only role, it has not, so far, been used in Ukraine.
When the INF treaty was implemented, thousands of the Soviet Union’s most modern missiles were decommissioned, along with their US equivalents. Today a huge proportion of Russian munitions used in Ukraine are vintage Soviet systems.
With conventionally armed INF missiles of similar vintage with ranges over 500km, Lviv and other centres in western Ukraine could have been devastated. Russia has instead had to use limited numbers of missiles built for air and sea launch as well as manned bombers to attack targets deeper than 500km from Russian (and Belarusian) territory.
The process that produced the extraordinarily effective INF treaty provides important guidance for a renaissance in disarmament in the 21st century. Back then – despite an intense confrontation between the two antagonists – successful agreements were reached to avert a catastrophic nuclear exchange.
How could new arms reduction treaties be put in place? “Negotiate from strength” is a powerful argument in diplomacy. Fortunately, the US and its allies already enjoy a more than ten-to-one superiority in military spending over Russia.
Unless western taxpayers have been badly served, this spending has translated into effective technologies, despite the Kremlin’s rhetoric over hypersonics and Putin’s doomsday nuclear torpedoes.
Nuclear powers often argue that nuclear disarmament is necessarily connected to concerns they have about non-nuclear forces and security in their regions. This is evident in the outbreaks of violence between nuclear-armed India and Pakistan, as well as the devastation caused by conventional forces which has been so evident in Ukraine.
A new global initiative might pick up the call from the G20 that “ours must not be an era of war” the subject of an upcoming event at SOAS University of London. Following the INF treaty mantra of a zero option, such an initiative could seek a global zero on missiles of all kinds down to a range of, say, 150km.
Negotiation is rarely easy, but Putin’s Russia is far weaker than was the Soviet Union with whom solid agreements were made. Meanwhile, Ukraine should have all the support it needs to restore its territorial integrity and the return of its citizens – not least the thousands of kidnapped children. But in the end weapons control is essential to survival in the long term.
Dan Plesch receives funding from the the Rowntree |Trust.
Mohandas Karamchand “Mahatma” Gandhi remains, even 75 years after his assassination, a useful symbol for many in India. For secularists, the leader of the country’s independence movement represents an imagined India of the past. For the current government, he is a means by which it can soften its international image.
In his 2002 essay, academic Ashis Nandy, mentioned four versions of Gandhi, who led India’s move from British colony to independent nation.
The first is the Gandhi of the Indian state and of official Indian nationalism. The second is a puritanical and sombre figure, apolitical and dependent on state funding, the subject of university seminars debating: “What would Gandhi do?”
The third is the “Gandhi of the ragamuffins”, opposing mechanisation, large-scale development and a high-consumption economy. The fourth is Gandhi the non-violent revolutionary, a worldwide phenomenon, influential in movements but no longer feared by tyrants, nor taken seriously by the left.
Over the past two decades, however, Gandhi and his legacy have taken a thorough beating.
Reappraisals of Gandhi are, admittedly, long overdue. Titles such as “Mahatma” (“high souled” or “venerable” in Sanskrit) and “Father of the Nation” have worn thin since his death, as new events in India and worldwide that brought new scrutiny to his life, work and politics.
Some of these seem far-fetched, for example equating Gandhi with Osama bin Laden and global jihadists on the grounds that they were similarly based on a “sacrificial humanitarianism”. Speculations about his sexuality provoked a debate about his supposed “celibacy”. In the aftermath of the #MeToo movement, his strange practice of sleeping next to naked young women was openly discussed.
The rise of much-persecuted Dalit people (previously known as untouchables) in political and intellectual spaces over the past two decades has given rise to trenchant criticisms of Gandhi’s complicity in the preservation of caste dominance, and the hypocrisy in his stands repeatedly that favoured the preservation of caste over justice and emancipation. Economist and politician Bhimrao Ramji “Babasaheb” Ambedkar’s evisceration of Gandhi’s politics is now more widely known and accepted than ever before.
Read more: Why the Uttar Pradesh election result is important for Narendra Modi's plans
Of those images of Gandhi named in the essay, some are now seen as enemies of the vision of progress of India’s current prime minister, Narendra Modi. Others have been refined to sit comfortably within the cultural nationalism of Hindutva, the project of creating a constitutional Hindu state and institutionalising its version of Hindu culture and social order in contradiction to Gandhi’s vision of a multi-faith nation.
Those using Gandhi’s methods of protest are now likely to be labelled “urban Naxal”, a Hindutva shorthand for intellectuals and activists involved in struggles of the rural poor, and have draconian legal charges slapped on them.
Gandhi’s international influence and reputation is now much diminished. Gandhi’s use of racist words for black Africans has fuelled righteous outrage against him. Malawi’s government stopped construction of a Gandhi statue after these accusations, though pressure from Modi’s government resulted in the completion of the statue later.
In Ghana, Gandhi’s statue was pulled down. Black Lives Matter movements in the US and in the UK also branded him a racist, and called for removal of his statues.
The most far-reaching bid to move India away from the nation that Gandhi imagined has come from India’s ruling Bharatiya Janata party (BJP) and its parent organisation, the Rashtriya Swayamsevak Sangh (RSS). The RSS was briefly banned after Gandhi’s killing for its involvement in the crime. It espouses a violent communal polarisation with an anti-minority politics, and several episodes of mob lynching with impunity, have been the fertile ground for its rise.
While Gandhi emphasised truth, fake news has been has been used to mobilise mass support for Hindutva. The RSS also tries to quote Gandhi in support of their political approach.
However, Hindutva organisations organise tableaux annually to re-enact the assassination on January 30 1948. Those elements of the RSS who supported “Gandhian socialism” are in political hibernation.
Modi, the Hindutva state and the new official nationalism, though, still need Gandhi. Under Modi’s modernisation fetish, major Gandhian ashrams, like Sabarmati, have been given such a tourist-friendly facelift, seemingly stripped of all historical gravitas.
Modi launched his Swachh Bharat (or Clean India] campaign using Gandhi as the logo. Home minister Amit Shah claims that Modi is Gandhi’s true modern manifestation.
Modi supports the construction of Gandhi statues worldwide. At the UN, Modi said he represented the land of Gandhi, claiming that erecting a bust at the UN headquarters was a matter or pride for all Indians. Modi’s Gandhian paradox is that the only Gandhi he wants to assimilate into his project is a Gandhi shorn of his core beliefs, principles and modes of political action.
Is the influence of Gandhi’s ideals finished then? Not quite. Activists from the anti-Citizenship Amendment Act movement (an attempt by Modi to end Muslims’ constitutional equality with Hindus) claimed to be follow Gandhian principles of popular protest. The farmers’ movement against Modi’s plans to give corporations power over Indian agriculture also tried to mobilise Gandhi’s legacy to their cause.
Perhaps, with the benefit of hindsight, there is a clearer picture now of the man, stripped of much of the myth and mystique. A resource for many social movements forging alternative ways to meet contemporary challenges.
Subir Sinha does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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