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15 May 2024

The Great Stink: Britain’s pollution crisis

How privatisation and the pursuit of profit lead to the devastation of England’s waterways.

By Will Dunn

At the bottom of a steep bank beside a dual carriageway in Oxfordshire, a tiny, unnamed stream flows between  the trees. The A40 thunders overhead but the water here is clear; among the pebbles and crumbs of golden sand on the bottom, a few freshwater mussels are growing. Sticklebacks flick between strands of green water weed. The stream passes through a culvert, emerges from a concrete pipe and flows into Colwell Brook, where almost everything is dead.

Colwell Brook is perhaps six feet across, and for its entire length only one form of life can be seen: Sphaerotilus natans, a type of bacteria that gathers into grey, hair-like filaments a few centimetres long. Sphaerotilus can thrive in water that is low in oxygen and high in organic matter, hence its colloquial name – sewage fungus. It covers the bottom of the brook for hundreds of metres. Beneath the waterline the fronds sway lazily in the gentle current, but when Peter Hammond pulls up a branch they form into dangling, snotty clumps, the kind of stuff you might expect to find in the guts of an elderly dishwasher.

Peter, a computational biologist, tells me the Sphaerotilus colonies provide a medium on which the other bacteria found in sewage sludge can flourish, such as the antibiotic-resistant microbes that grow in the faeces of people taking certain medications. Colwell Brook is also polluted by all the other things that 40,000 people have flushed into their drains: bleach, detergent, food waste, drugs and microplastics. The water is a luminous orange-grey. “That is now the typical colour of the River Windrush in summer,” says Ash Smith, a retired police officer, “and this is not unique. Many, many other rivers have a similar story.” Colwell Brook flows into the Windrush downstream; the Windrush joins the Thames, which flows into the sea, where the pollutants enter the wider food chain. 

It is a bright, windy April day but the smell becomes unavoidable as we walk upstream to where two pipes emerge from the bank. The first rushes with clear water, treated by the sewage plant, which is visible beyond the fence on the other side of the brook. The other pipe, 20 feet upstream, disgorges a thick, greasy current of brown liquid. Most of the wet wipes and condoms have been sieved out but this is effectively an open sewer, flowing directly into the river. It has been doing so continuously for the last nine days. The air is thick with the smell of rotting faeces, but not only that. Every now and then, the brown stuff flowing from the pipe surges darkly, and a new smell, acrid and menacing, belches across the stream. Ash adds that the outflow will also contain the waste from a nearby abattoir.

Wearing gloves, Ash scoops a small phial of water into the brook. With a few drops of dye and a handheld colorimeter (a device about the size of an egg timer) he can determine how much ammonia is in the sample. After three minutes the reading appears: it is ten times the lethal level for fish.

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Here is the stark truth of how the UK’s water industry is regulated. The treated water from one pipe will be tested by the Environment Agency, and it will pass inspection while the other outflow pours human faeces and pigs’ blood into the same stream, 20 feet away. The amount of time in which untreated sewage is spilled is not measured by the regulator itself but by Thames Water, the private company doing the spilling. The environmental devastation we’re witnessing won’t be recorded as a serious pollution incident because they require certain markers to be observed, such as dead fish, and here the fish were all killed years ago. Government and the market have reduced the complex and elegant ecosystem of the brook – and hundreds like it – to a pungent slime.

The summer of 1858 was unusually hot and the Palace of Westminster (newly rebuilt after a fire in 1834) was mostly empty. London was the largest city in the world by population, and the untreated sewage of more than three million people was running directly into the Thames. The windows of the Commons and Lords were hung with drapes soaked in chloride of lime (bleach) and the riverbank outside parliament was doused with carbolic acid, but few could remain in the offices above the stinking mud.

MPs told the Derby Mercury that it would “not be possible to legislate, surrounded and penetrated by this mephitic vapour”. Diarrhoea and throat infections were common. Committees abandoned their meetings as MPs and peers wretched and gasped in the miasma. As a result the Tory government went largely unopposed – “Gladly will the Liberals… consent to their reign,” a contemporary account reported, “if they will but hurry on the necessary business, and let us go.” The Great Stink commanded a majority.

Today, the state of the nation’s rivers is once more an electoral issue. Far from protecting the government, however, it now confronts Tory voters with the reality that their party’s leadership of the country for the past 14 years has been anything but conservative. Britain’s water companies spent 3.6 million hours dumping raw sewage into rivers in 2023, a more than 100 per cent increase on the previous year. Rowers in this year’s Oxford and Cambridge boat race complained of bacterial infections impeding their training; the post-race tradition of jumping in the Thames has been abandoned. Lake Windermere has begun to turn green in the summer. On beaches in Kent, tomato plants that grow from undigested seeds in human faeces spring up each year.

River pollution, litter and fly-tipping are raised on doorsteps in every rural constituency. Last year, a poll of 6,000 people found that more than half of the people who voted Conservative in 2019 would consider the government’s handling of the sewage crisis when voting in the upcoming general election.

The political implications of the new Great Stink are about to become even more significant, however, because the finances of Britain’s privatised water industry, which has taken on debts of more than £60bn since it was privatised in 1989, are if anything more putrid than the rivers it pollutes. The largest of Britain’s water companies (the same company that is spilling sewage into Colwell Brook) is Thames Water, which supplies water and sewage services to 16 million people. It may be about to collapse.

A person with inside knowledge of Thames Water, who asked not to be identified, told me about the wide spread frustration within the company at failing equipment and a lack of money to fix problems that have been growing for years. They also said there is a sense among those working for Thames Water today that they are paying the price for the past, specifically the years 2006 to 2017, when the firm was owned by the Australian investment manager Macquarie. It loaded Thames Water with billions in debt while paying very large dividends. In that time, debt rose from £3.4bn to £10.8bn. “It seems like people got carried away with taking money out of the business,” the person said.

The consequences are now becoming evident. On 28 March, shareholders in the parent company of Thames Water, Kemble Water Finance Ltd, announced it would not make a planned £500m investment to prop up the company’s finances; it was, they declared, “uninvestable”. A week later, on 5 April, Kemble notified its creditors that it had begun to default on its debts. For any ordinary company this would be a disaster, but Kemble is not in a normal position. As the monopoly provider of an essential public service, there is no question of Thames Water being allowed to fail.

The government has drawn up a plan (“Project Timber”) for placing Thames Water into special administration, as it has with energy companies in recent years. It is a plan no one wants to use: shareholders would lose around 40 per cent of their capital while the state would take on the cost (estimated at £16bn) of cleaning up its balance sheet.

Thames is offering to avoid this situation, at a cost: it has pitched for steep increases in bills (by up to 44 per cent by 2030), looser rules on dividend payouts and lower environmental penalties. Its shareholders – a mix of pension and sovereign wealth funds from around the world – will invest more only if they can expect to receive more. The board of the Water Services Regulation Authority (Ofwat), which is responsible for economic regulation of the privatised water industry, will meet on 23 May to discuss whether a quarter of the country’s households can be asked to rescue Thames Water from itself through higher bills; the deadline for agreement is next month.

The government, however, can’t afford to call Thames Water’s bluff; the £16bn debt on the company’s balance sheet is more than the “headroom” of about £13bn allowed by the fiscal rules to which Jeremy Hunt and Rachel Reeves are both committed. A deepening crisis at Thames Water could cause other companies to wobble (as happened in the deregulated energy industry), making the wider problem more expensive and harder to fix.

The bridge over the Windrush was a favourite spot for Peter and Eileen Hammond for many years before they moved here, a waypoint on their walks through the Oxfordshire countryside. Then, one day, they drove past and saw that the derelict mill-house and cottages were being redeveloped. They bought one, moving in in 2002. Their garden, shared with the other three cottages, is across the lane: a long thin island, sharpened to a point by the river.

Had they arrived a century earlier they might have bumped into Nancy Mitford, who lived at nearby Asthall Manor (fictionalised as Alconleigh in The Pursuit of Love and Love in a Cold Climate). The Windrush was Alconleigh’s “famous trout stream”, to which Uncle Matthew came for “his greatest treat of all the year, an afternoon’s chub fuddling”. The fuddler was employed to intoxicate or fuddle the numerous fat bronze chub because Matthew – like Mitford’s father, Baron Redesdale – was a fisherman who wanted the trout to flourish. Nancy and her father are buried now at a small church along the lane.

Ash Smith, who moved here in 2013, has a video of the river from 1998. When he watched it recently he could hardly believe the colour; the river looked as if it was full of gold. Clear water ran over bright yellow pebbles and sand, laced with rich green swathes of water-crowfoot. Barbel and roach hung in the current between the reeds. The chub were often visible from the bridge, especially in the spring when they would abandon all caution to spawn, scales flashing, in the shallows.

Peter and Ash noticed the river getting worse. The water became more turbid, there was less wildlife, fewer ducks wandering into the garden. They began, like so many of Britain’s amateur river watchers, by taking a few samples, but Peter and Ash are far from dabblers. Peter worked at University College London and Oxford, training AI models to recognise patterns in medical data; Ash has 30 years’ experience as a police officer, investigating corruption. They have spent years collecting and analysing evidence on how Thames Water has treated the Windrush.

As in many rivers, the deterioration of the Windrush appears to have begun around 2010. Peter and Ash believe the river’s decline was related to two policies: operator self-monitoring, or OSM, which was introduced by the Labour government in 2009, and austerity.

The Environment Agency, which regulates water quality, was a casualty of the latter. Among the many achievements of Liz Truss, her time as environment secretary from 2014 to 2016 is notable: she oversaw the agency’s tightest period of spending on water quality. Despite years of headlines on the sewage crisis, real-terms water quality spending in 2022/23 was 22 per cent lower than in 2012/13.

Peter and Ash say the Environment Agency has failed in its remit. OSM allowed companies to mark their own homework, and to test water when they know it will be cleaner. The companies, Peter claimed, “only monitor half of the sewage that’s ever treated. For two big heaps of sewage in a day, the second half is never monitored.”

The pair began requesting data under the Environmental Information Regulations, a retained EU law that compels public authorities to release information on the environment. A common tactic used by water companies was to provide a bewildering excess of numbers – “sending the needle and the haystack”, as Ash describes it. They didn’t realise they were submitting data to a professor of computational biology.

Peter gave his algorithms ten years of sewage treatment data, and the results – published in a peer-reviewed journal, Clean Water, in 2021 – showed not only that sewage had been dumped into the river, but that it had happened during dry weather, when doing so could be illegal.

Water companies don’t hose effluent into our waterways for the fun of it. The “spills”, as they are known, are caused by the fact that we have combined sewers: one pipe carries away the rainwater from the street and the waste from our homes and businesses. During periods of heavy rain, the extra water in the pipe spills out from “storm overflows” to avoid sewage welling up out of the drains in the road. This is perfectly legal and some overflows are almost entirely rainwater. With old, cracked pipes, however, groundwater gets in and the pipes overflow even when it isn’t raining. These “dry spills” are illegal. Peter and Ash showed that they were happening far more often than the water companies, or the Environment Agency, admitted.

For years this has been described by water companies and politicians as a problem of “Victorian” sewers. The combined sewer was a Victorian invention, but then so was the self-raising hat. In fact, modern sewers are the problem. Very little of the British sewer system – less than 1 per cent, in some areas – is Victorian, and it is not the Victorian sections that are responsible for the most spills. It is the smaller, cheaper, less well-maintained parts – much more recently built – that are at fault. Meanwhile, above ground, the pressures increase as populations grow, extreme weather becomes more likely and millions of front gardens are paved over.

To see how far a water company will go to avoid building new infrastructure, I travelled to Exmouth in south Devon. The town’s main industry is tourism; since the 18th century people have come to Exmouth to swim in the sea. Among them is Jo Bateman, who arrived via the long-distance coastal path. After a week’s holiday walking with her dog, Jo told me, she “fell in love with the sea”. She sold her house in the Midlands, quit her job and resumed walking the path until it brought her to Exmouth, where she has lived since 2018.

We followed the long curved beach, a strong wind blowing the sand around our feet. In the sea, kite-surfers leapt through the spray. Somewhere out there, a sewage outflow – incredibly, South West Water doesn’t know where it is – regularly discharges untreated sewage directly into the sea. The advice from the water company is to avoid swimming for 48 hours after a spill; for anyone following this advice, this would have been the first day the water was safe for almost two weeks.

In December, a pipe that carries sewage to a nearby treatment plant broke. While it was repaired, the sewage was pumped into large tankers and driven to the pumping station near the beach. For several days, a constant stream of tankers – 240 loads per day, of up to 18,000 litres per tanker – arrived to pump untreated sewage directly into the sea.

Other residents told me this was far from a one-off event. One described the night, a few years ago, when he awoke to the sound of heavy goods vehicles thundering along his quiet street. The trucks have become an overground pipeline that can be redirected to take sewage wherever it can be most cheaply treated – or dumped.

South West Water (SWW) has the highest sewerage bills in the UK. For decades, residents of the south-west have been told that this is because they’re paying for cleaner beaches (and therefore the jobs that come from tourism), but this isn’t true. SWW’s owner, Pennon Group, has made the steepest cuts to capital spending of any of the UK’s privatised water companies. Its spending on waste water treatment was slashed by 60 per cent from the 1990s to the 2010s. The company’s Environmental Performance Assessment for pollution incidents has been rated red (“significantly below target”) every year since 2011.

Bateman began by refusing to pay the sewage part of her bill, and soon received letters that raised the prospect of bailiffs and county court judgments. “It did freak me out,” she told me, “so I started paying it again.” Instead, she sued SWW for “loss of amenity”. Her claim – which she has prepared herself, using only her phone, as she doesn’t own a laptop – is that SWW denied her the opportunity to swim on 54 days of last year by dumping sewage when there was not a legal reason to do so.

The claim is tiny – less than £400, including her costs – and there is evidence that similar claims have been quietly paid off. Bateman wants her day in court, however, to defend the right to the physical and mental health benefits of swimming in public waters. This is a right the company claims does not exist: in a letter to Bateman, it told her “there is no absolute right to swim each day”.

Other lawsuits are for higher stakes. Professor Carolyn Roberts, for example, is the plaintiff in a class action against six water companies that have, she alleged to me, “seriously under-declared” the amount of sewage they have spilled into rivers. In doing so, she says, they have persuaded Ofwat to allow them to increase bills by more than they should have done. “The extent of under-reporting is very, very large,” Roberts claimed, and so, therefore, is the penalty: if successful, the action could require the companies to refund their customers by up to a total of £800m.

Even an award of this size would be small, however, in comparison to the tens of billions extracted from billpayers and decaying infrastructure in the past 35 years (England and Wales remain the only countries in the world to have fully privatised their water industry).

Privatisation was a con from the start: the Thatcher government had restricted the amounts that regional water boards could borrow, preventing them from investing in infrastructure, then presented private sector investment as the only answer to the investment crisis it had created.

Michael Howard, who as minister for water and planning from 1988 to 1989 oversaw the privatisation process, wrote in the Telegraph last year that “there is no such thing as a free lunch”, and that the best option is private equity funding, because it doesn’t affect fiscal headroom or the price of government debt. What the public understands, and Howard does not, is that they will be paying for water anyway. The £78bn that has been distributed to shareholders since privatisation has been extracted entirely from the public. The £96bn the industry says is needed to fix the system by 2030 will also come from the public.

It has always been obvious that bills will be higher and infrastructure worse if that money is raised by private investment rather than government borrowing. Mathew Lawrence, the director of Common Wealth, a think tank that specialises in research on asset ownership, explains that the underlying problem is the “maturity mismatch” between investment in public infrastructure, which pays off over the very long term, and the time-limited investments created by financial institutions.

An investment manager such as Macquarie, for example, will create ten-year funds in which its clients will invest. These funds, Lawrence explained, work against long-term fixed capital investment, “because if you’re exiting within ten years and you’re preparing to exit before then, why would you undertake 25-year-long capital investment projects?”

There’s also a risk mismatch in any such deal. Thames Water shareholders include the sovereign wealth funds of China and Abu Dhabi, which collectively hold more than $2trn in assets under management. Thames Water represents a tiny fraction of a percentage of their overall investments and the risk of its failure as an investment is easily tolerated. The same is not true for the 16 million people who rely on the company for clean water.

The only people who win from keeping the water system off the government’s balance sheet are politicians like Michael Howard (or Jeremy Hunt, or Rachel Reeves), who can claim to have saved the country money by relying on the munificence of the private sector. But this is a fiction, Lawrence explains: “It’s not that the UK’s debt-to-GDP doesn’t go up. It’s just that it happens on private sector balance sheets, in a more expensive fashion”.

Most of the public (69 per cent, in the most recent YouGov poll) now believe water should be renationalised, but none of the major political parties is committed to doing so. Both main parties say operator self-monitoring should end (in the next parliament) and Labour wants to block executive bonuses and issue criminal charges to polluting companies. Among all the people I spoke to, however, there is a consensus that the regulators, Ofwat and the Environment Agency, are in need of reform, particularly the latter. Carolyn Roberts described the agency’s testing of rivers as “woefully inadequate”, while Ash Smith called it “probably the worst organisation I’ve ever encountered, in terms of incompetence and lack of professional curiosity”. 

More fundamentally, however, there needs to be a recognition that the political mathematics that have led us to this point have failed to produce the right outcomes. Fiscal rules have created a system in which government is incentivised to portion essential services off to the private sector to keep them off the balance sheet. This creates a mass of competing needs that Dieter Helm, professor of economic policy at Oxford University, describes as “the classic example of system failure”. Every aspect, from agricultural subsidies to flood defences to planning regulations and parking spaces, is considered in isolation. “We pay farmers to pollute [through agricultural subsidies], and then we pay water companies to take the pollution out of the water.”

For now, Colwell Brook will have to wait. Thanks to Thames Water’s financial problems, planned works will be pushed back into the next five-year spending period. Water companies have little to lose from doing this; the longer environmental problems persist, the more they can say they will need to increase bills to fix the disasters that have occurred on their watch. In rivers and streams, in village ponds and on beaches, Britain’s new Great Stink will continue to grow until Westminster decides it can no longer hold its nose.

This appears in the 17-23 May issue of the New Statesman magazine

Illustration by Carl Godfrey

[See also: The Tory doomscroll]

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This article appears in the 15 May 2024 issue of the New Statesman, The Great Stink