I was pleased with this reaction to my Twitter thread on the water companies:
After three hours, the traffic is pretty exceptional:
I am told there will be a Guardian story on this later today.
Radio interviews have begun.
This story is big precisely because it lays bare the whole fallacy of privatisation that has imposed massive costs on us all.
But the question is, will the government and the Labour Party have the courage to do anything to address this issue?
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Congratulations – it restores your faith in common sense and shows the paucity of proper debate and outrage in the mainstream media.
A 40% hike in water prices?
When the private investment and privatisations was meant to create choice and competition and investment?
Bollocks!
With this, it’s not just a case of the emperor having no clothes – rather we are able to see beyond the skin and into the skeleton – the structure of this privatisation – which has been set up to do one thing really and that is to extract money – not deliver a service.
The hike could be much bigger than that, I fear
There will be a whole load of non-payers then. People will simply refuse, and quite rightly, IMO.
It certainly is a “biggie”how the Labour Party under Starmer will react now that you’ve thrown down a very well argued “gauntlet” for renationalisation of the water and sewage industry. Indeed from Starmer’s response to this will have to come clear general policy from him on those areas of the economy where the public are held captive in a monopoly or quasi-monopoly situation like the NHS. I suspect that Starmer will try to fudge with meaningless sound bites or policy announcements he later u-turns on as per his usual pattern although I hope he proves me wrong.
Renationalisation of water (and power, rail etc) has been a standard Labour policy determined at Conference. Starmer has not only removed what was left of internal democracy, he has totally perverted any remaining social democratic policy. The likelihood of doing the right thing by citizens is effectively nil.
I would also like to say that the fiasco with the water and sewage industry in the UK is nothing new. We’ve been here before with the deregulation of the finance industry and the failure of central banks and others to regulate that industry which ultimately led to the Great Financial Crash of 2007/2008. All of course happening under the Neoliberal Death Cult mindless mantra of market fundamentalism where by the market always finds equilibrium to avoid such crashes!
Fair points, begging the question, if you, Richard, me, most of the commentators on this blog can see the underlying causes, why are the politicos unable to do so? except in extremis (I note that Thames may be “temporarily” (??) nationalised. The conclusion being that they are either blind, stupid or corrupt (captured) or a combo of all three. Time for findamental changes to the festering body politsick.
Follow the money…
You never hear of organisations being temporarily privatised, funnily enough!
No. It’s not a matter of courage. Neither of the main political parties has any intention of moving one iota away from the status quo. They like it how it is thank you very much, and see no reason to change. It matters not a jot to them that the status quo hurts the majority, as long as the minority of which they are part continue to be the principal beneficiaries. The present government has legislated to make it almost impossible for ordinary folk to engage in any sort of meaningful/impactful protest, and when it comes to the next election, those who always vote Tory will do so, as will those who always vote Labour, so there’s no threat at the ballot box either. Those in Westminster know this, so despite our grumblings and Twitter storms and Fergal Sharkey on the Today programme, nothing will actually change – we are invisible, powerless and therefore irrelevant.
Our only power is in our pocket, and they have effectively destroyed that too.
If WildFish can take the government to court to enforce legislation mandating clean water and avoidance of sewage pollution why can’t the government be taken to court for failing to ensure the NHS is pertinently responsive or timely relevant in its provision of services? (Increase in deafness amongst children scandal for example)
https://wildfish.org/project/sewage-pollution/sewage-pollution-campaign/
This may be wishful thinking but am I getting a sense that perception is beginning to turn regarding abusive pricing, poor ownership models and written in corruption? If you were to start a campaign about failed models and public interest Thames Water would be a gift.
I remember, post Hatfield, when Railtrack had to get a bung from government to fund track inspections. A lot of it went out the back door in dividends and I thought that privatisations had had their day……..
It would be great if it has
Geatting Feargal Sharkey on side would be good and he has now retweeted me twice this morning
And where exactly are many people going to find the money for substantially increased rates on their water bill to pay for the neglected investment in water and sewage treatment thanks to fool at the BoE?
“Squeezed households ran down bank savings at record pace in May
UK households ran down their bank savings at a record pace last month, new Bank of England data shows.
During May, households withdrew £4.6bn from banks and building societies, which is the highest level of household withdrawals on record.
This was only partly balanced by £800m moved into National Savings and Investment accounts, by savers looking for higher rates than are available from deposit accounts.
It is a sign that households are now using savings to sustain living standards, says Daniel Mahoney, UK economist at Handelsbanken.
https://www.theguardian.com/business/live/2023/jun/29/uk-privatisation-thames-water-crisis-nationalisation-cost-of-living-economics-business-live?filterKeyEvents=false&page=with:block-649d4c738f0882178ec6a32d#block-649d4c738f0882178ec6a32d
The tweet from Prem Sikka reveals there is blatant corruption taking place under this Tory government and Keir Starmer attending Rupert Murdoch’s summer party this year strongly suggests that it may well continue under any administration he could form!”
Prem Sikka’s tweet:-
“Thames Water on the edge.
Clean bill of health from auditor PwC.
Paid £37.1m dividend in 2022 (£32.9m, 2021).
Thames paid £224.6m interest (£227m, 2021) on loans from other group members. Some at 10%.
Yes, shareholders collected £522m 2 yrs.
OFWAT/Govt let them do this.
Partying with Rupert Murdoch:-
“Keir Starmer has humiliated the Labour Party once again – this time by turning up at a party thrown by that great hater of working-class people, Rupert Murdoch.”
https://voxpoliticalonline.com/2023/06/26/is-this-the-reason-a-labour-leader-has-attended-a-party-by-rupert-murdoch/
More information on the effect the moron at the BoE has had. Now the Tory government will substantially increase water and sewage charges on top of mortgage and cost of living hikes as a response to the scandal in the water and sewage industry making matters even worse for many:-
https://www.theguardian.com/business/2023/jun/29/uk-households-withdrawing-savings-at-fastest-ever-rate-official-figures-show
It’s awful and some of what’s quoted is ugly. For instance the reference to “excess savings” by Daniel Mahoney, tells us what he thinks about people having the temerity to have savings. And also, his weird reference to “high inflation environment” is suggestive of a natural phenomenon, clearly a deliberate misdirection away from this being human caused, on behalf of those vile humans causing it. And then the speculative comments by Thomas Pugh are plain bizarre, flatly contradicting himself, clearly demonstrating his utter cluelessness. And then we discover that it is wealthier people who have saved and are dipping into savings. And then, almost as an afterthought, people paid little and renters just manage to get a place at the end of the queue. Also, all the comments by economists are reactive. The whole article tells us that whoever was quoted knows absolutely nothing, they’re reading tea leaves. And the article is written is utter “he said she said” garbage. The author of the article is clearly clueless as there’s no fact evaluation going on.
In answer to your final question, on the evidence of past experience, probably not. Our politicians are not up to the challenges of our age.
One Million views and climbing in under 7 hours. Perfect timing of your report illuminating a perfect mess. Feargal Sharkey is a formidable campaigner – one politicians fear. You’d hope that these are circumstances where directors and shareholders can be held liable for the companies debts, but the actions of the regulator seem to have been about giving protective cover. Even with the Competition and Markets Authority (CMA) waving a red flag about debt loading.
https://www.theguardian.com/environment/2022/dec/01/water-companies-debts-since-privatisation-ofwat-refuses-impose-limits
Thanks
As late as December of last year according to the Guardian article ÿou posted Ofwat was refusing to impose debt uptake limits on the industry:-
“Ofwat is refusing to limit the soaring debts run up by water companies as research reveals the firms have outstanding borrowing of almost £54bn accrued since privatisation.”
Heads need to roll both at Ofwat and in the Tory government. That you know they won’t tells you how low this country has sunk and how nobody in their right mind would want to invest in it!
I think we have to be careful about suggesting that there is just one reason for privatisation. What I don’t know is the proportion of people:
1. Who know full well that privatisation is a scam to divert billions into private hands
2. Who believe that privatisation provides a fair remuneration for those that run it, and the costs are easily afforded by any who works hard
3. Who believe privatisation is supposed to do what they were told, and it more efficient due to competition, and dividends are a small return for that improvement.
4. Who believe that nationalisation is inherently bad because it costs the tax payer money.
5. Who know that nationalisation, if funded and run appropriately, is cost effective for all.
The perverse thing I find particularly galling about this and how the other utilities are run is that it is the idea of market fundamentalism that seems to underpin the whole mess. And yet I don’t think it can be said that any of the models are run on market terms. How can anything claim to be such when failure is simply rewarded with a bail out, a quick wash in the states financial washing maching and then back to business. Private profit and public burden.
Of course I’m sure that those involved are quite aware that they are not operating in any kind of real market. They simply say they are to reinforce that this model is the best.
I have been making this point in radio interviews
I gort 25 minutes on Radio 5 at 1.05pm
Well exactly it’s not as though in a monopoly service situation you can download a a water supply or for that matter a flushing network for your effluent plus like the railways swopping franchises for under-performance hasn’t much benefitted the public in terms of competitive pricing and reliability has it!
What you are talking about is known in the economics profession as hegemonic stability theory albeit at the national level whereas it’s usually applied at the international level:-
https://en.wikipedia.org/wiki/Hegemonic_stability_theory
Such a theory of course forces economics to include political science and in my view rightly so. Away goes the naive and moronic market fundamentalist ideology and of course we are seeing this with a withdrawal from investment in China by Western companies under pressure from Western governments.
Scottish Water was not sold off. Is the situation any better in Scotland?
Yes
The situation is complicated in Scotland bevause of the amrket for undsutrial water and better still in Wales, but both are better than England
In Northern Ireland water is still nationalised. Paid for in Council tax (which is much higher than in UK as a result).
I am aware
Ireland is rarely short of water 🙂
I saw your piece on Politics live about Interest inflation a few days ago and started following this blog. Regarding the Utilities being in the private sector, I came to the conclusion years ago that selling them off to the private sector, especially (potentially hostile) foreign owners was like selling the wiring, gas supply, plumbing and stairs and corridors in your house to others. Water is the worst because you cannot switch, there is no competition. The huge irony, that most people don’t realise, is that many of our Utilities are owned by nationalised or state funded companies from other countries, eg EDF. Keep shining the spotlight.
I had this letter published in The Herald this morning:
Thames Water is collapsing under a mountain of debt and the other nine English water companies are in similar hock. English consumers pay the highest water charges, leaks are rife and waterways are full of excrement. Privatisation was sold to the public as an efficiency measure – you’ll pay less for better quality water. The government knew it was a lie. It was a multi-billion-pound wealth transfer from consumers to shareholders.
Shares were priced well below value to guarantee a successful sale. People cashed out their profits and the firms were snapped up by private equity, institutional investors and large foreign infrastructure firms. Ever since, companies have been loaded with debt to enable large shareholder returns while investors have been exposed to minimal risk and a flaccid Ofwat passively watched. The FT admitted that privatisation was little more than an organised rip-off.[1]
How did Scotland dodge this bullet? Over 90% of Scots opposed water privatisation. So, in March 1994, Strathclyde Regional Council organised the biggest council referendum ever held. People were asked, “Do you agree with the government’s proposal for the future of water and sewerage services?” Over 70% of eligible voters turned out and 97.2% said NO. The UK Government dared not proceed with less than 3% support. Scotland’s water stayed in public hands, which is why our water is cheaper and cleaner than England’s.
But London got its revenge. The Tories abolished Strathclyde Regional Council in 1996, probably because it stood up to the UK government.
Westminster is coming for our water again, just as it came for our oil and renewables. To stop the theft, the Scottish People must reclaim their voice and restore their sovereignty.
[1] https://www.ft.com/content/2beee56a-9616-11e7-b83c-9588e51488a0
Thanks