Carney is doing what he has always done: defend the interests of the international rentier class.
Canadian Prime Minister Mark Carney has reportedly been trying to warn the British government off nationalising Thames Water, even on a temporary basis, with a threat that it could damage foreign investment in Britain. According to the Daily Telegraph, Canadian officials are increasingly concerned that any move by PM Andy Burnham to place Thames Water under state control “could result in heavy losses for overseas investors”:
Ottawa is thought to have cautioned that any expropriation of privately owned assets without accompanying compensation could jeopardise further investment in the UK economy. Canada’s so-called Maple Eight pension funds, and its banks have poured tens of billions into airports, ports, the energy sectors, key utilities and property.
The dramatic intervention underscores mounting anxiety about the Prime Minister’s hostility towards the private sector. Mr Burnham has promised to “end neo-liberalism” and undo Margaret Thatcher’s legacy of privatisation and deregulation.
Yet private property rights are a fundamental pillar of the UK’s legal and economic system, and one of the key protections that make Britain a top destination for overseas capital.
Ottawa was lobbying primarily on behalf of the Royal Bank of Canada (RBC), the country’s national bank champion. It is not known whether the Canadian officials were acting on the instructions of RBC senior figures or independently.
The discussions are understood to have occurred in recent weeks. Mr Carney met the Prime Minister on a visit to Liverpool last month where the pair watched Everton football club, who they both support.
RBC is a senior creditor to Thames Water, and is among a consortium of more than 100 financial institutions that has proposed a £16bn rescue package in which around a third of the supplier’s borrowings would be written off in return for ownership.
As Yves might say with a sardonic smile, “quelle surprise”. Mark Carney, an ex-Goldman Sachs banker and former central banker, is lending a helping hand to Canada’s largest lender by trying to nip in the bud any attempt, however unlikely, by a British government to renationalise an insolvent water company.
Carney may have gained plaudits around the world for his opposition to Trump and was even tipped to win the Nobel Peace Price a few weeks ago (despite supporting both of the big wars of our age as well as doing nothing to oppose the genocide in Gaza), but let’s be real: he is a self-described elitist and globalist.
Carney was a member of the WEF at Davos, president of the Royal Institute of International Affairs at Chatham House in London, and a member of the board of the Peterson Institute for International Economics in Washington. Even more importantly, he is one of very few people to have served as governor of two G20 central banks, the Bank of England and the Bank of Canada. He also succeeded Mario Draghi as chair of the Financial Stability Board (2011-2018).
In trying to prevent the UK’s nationalisation of Thames Water, Carney is doing what he has always done — i.e. defend the interests of the global rentier class. The problem for Carney, and the rentier class he represents, is that the proposed alternative to nationalisation — a creditors deal that would see a sizable chunk of Thames Water’s roughly £20 billion of debt written off — is an even worse deal than the current arrangement.
An Anomaly in the World
When it comes to water provision and management, England is an anomaly in the world. It is, as far as I can tell, one of only two countries where water, the most essential of all natural resources, is owned exclusively by private companies for profit. The other country is Chile. According to The Guardian, 90% of countries run state-owned operations.
In the case of Chile, it was the Pinochet government that drew up the “Código de Aguas” (water code) in 1981 — with input, of course, from the Chicago Boys. The post-dictatorship administration of Eduardo Frei Ruiz-Tagle completed the job in 1998 by privatising regional water and sanitation companies.
In the case of England, it was Margaret Thatcher who privatised the whole lot in 1989, promising that a fully privatised water sector would deliver higher investment. It hasn’t quite worked out that way. Indeed, as a 2024 Guardian editorial points out, the “decision to put water – a natural monopoly – in private hands defied the Thatcherite logic of competition and efficiency”.
There was never any possibility of pitting rival companies against each other to raise standards. No other water supply is competing for a household’s business.
Instead, private water monopolies have been used as vast enrichment vehicles for international investors — including pension funds, infrastructure funds and, ironically, many sovereign wealth funds…
Click here to read the full article on Naked Capitalism
