Parliament could renationalise the water industry in England without being obliged to compensate shareholders, according to previous UK court judgments cited by campaigners.
Activists are putting mounting pressure on the government and opposition parties to look again at the privatised water system after criticism that the industry is not acting in the public interest.
The Guardian revealed this week that more than 70% of the privatised water industry is owned by foreign investment firms, private equity, pension funds and, in some cases, businesses based in tax havens.
The latest polling on nationalising energy and other key utilities, including water, shows the vast majority of the public
are in favour and more
than 200,000 people have signed a petition calling for water to be nationalised.
Supporters of nationalisation cite rulings from the high court, court of appeal and European court of human rights (ECHR) on shareholders’ general rights to compensation in a nationalisation.
The rulings were made in cases involving Northern Rock shareholders, who were paid zero compensation when the bank was taken into public ownership during the 2008 financial crisis.
The court of appeal ruled against the shareholders, saying: “The court would only interfere if it were to conclude that the state’s judgment as to what is in the public interest is manifestly without reasonable foundation.”
When the case was taken to the ECHR, the court ruled there was no general right to full market-value compensation. Judges said: “Legitimate objectives in the ‘public interest’, such as those pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value.”
Campaigners say the water industry should be renationalised after three decades in which the nine main water and sewerage companies have run up net debts of almost £54bn and paid out dividends of £65.9bn while overseeing a lack of investment.