What has happened to Britain’s rivers isn’t a mistake. The fact that serious pollution is up 60 per cent on the year, or that only one in seven rivers can be called ecologically healthy, is the result of corporate tactics. It is effluent from the murky world of private equity.

Some 2.5 million people in the UK now work for a business that is ultimately owned by private equity. Since the 2008 financial crisis, Britain has become a prime target for takeovers, driven by low company valuations, favourable exchange rates and a pliable regulatory environment. Everything from Bella Italia to the Blackpool Tower, Travelodge to Legoland, the AA to Zizzi, has been owned by private equity. Today, it claims to make around £7 in every £100 generated for the British economy. In the first half of last year, 60 per cent of the total invested in UK firms via private equity was from abroad.

Many will see this as a success story: British ingenuity attracting international money. Those who worry about foreign investment are seen as misguided and a little jingoistic. The emphasis should be on the investment, rather than worrying that our high streets and infrastructure have been sold off to foreign buyers looking for a good deal.

The reply to these free marketeers can be seen floating down our rivers and in the balance sheets of our creaking water companies. Back in 1991, water firms had a debt-to-equity ratio of 4 per cent. Today it’s around 70 per cent, with some firms having neared 95 per cent. Where did that money go? Clearly not enough of it has been funnelled into infrastructure.

Take Thames Water, which serves a quarter of all British households. In 2006, the utility was bought by a consortium led by the Australian private equity firm the Mac-quarie Group. Over the next 11 years, Thames Water’s debts grew from £3.2 billion to £10 billion, while £2.8 billion was paid out in dividends. Macquarie borrowed against the value of the business – reservoirs, treatments works, even future cash flow – to pay out even more to shareholders.

Thames Water’s parent company became enmeshed in a complex web of intercompany loans and shell structures in places like the Cayman Islands. During the period of Macquarie’s ownership, the company paid just £100,000 in corporation tax. Thames Water is now so heavily indebted, its infrastructure so degraded, that there are serious discussions about renationalisation.

In 1991, water firms had a debt-to-equity ratio of 4 per cent. Today it’s 70 per cent. Where did the money go?

Macquarie defends its behaviour, arguing that they did invest in infrastructure and that Thames Water was never publicly criticised by Ofwat during its tenure. To which one might reply, so much the worse for the regulator. Perhaps that’s why Labour announced this week that they will scrap Ofwat.

As it happens, Macquarie also owned the Hampshire ferry company Wightlink, which under its control saw borrowing increase to pay shareholders, with corresponding timetable reductions, the near doubling of ticket prices and a lack of investment in ferry upgrades. It’s almost as........

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