Six water companies overcharged customers between £800m and £1.5bn by “significantly or systematically” underreporting the true scale of their sewage pollution of rivers and waterways, a tribunal has heard.
In the first environmental competition class action against water companies in England, lawyers argued that the privatised firms had abused their monopoly position to mislead regulators over the amount of sewage they were discharging from their assets over the past 10 years.
As a result, the companies, Thames Water, Yorkshire Water, Anglian Water, Severn Trent, Northumbrian Water and United Utilities, were able to charge customers higher bills than they would have been allowed to if they had provided the regulators with a true picture of their sewage pollution.
Is this claim true? Time will tell: this is simply a case stated in a legal action at present. I have, however, spent some of my own time looking at the reporting of these firms, including on sewage discharges and what we know is that less than a decade ago, these were exceptionally incompletely, and so very poorly, monitored.
If that is the basis of the claim, and it would seem it would be, what the defence of these companies might be when subsequent events have proved that the scale of discharges was much larger than expected as a result of better recording systems being put in place, is hard to work out.
Will the case be won in that case? That is not for me to judge. But what I do know is that this case highlights the indifference that the water companies had to the pollution they were causing for a very long time, at cost to us all.
Should they now bear that cost? I think so, but that is not for me to decide.
What I can, however, say is that they are not alone in their failure. Every day, hundreds of the largest companies in the world pump vast quantities of pollution into our atmosphere, onto our land and into our water, poisoning the world we live in and making the future of human (and some other) life on this planet harder to imagine, and they bear none of the costs of doing so.
That's the price of neoclassical and neoliberal economists thinking that the cost of externalities does not matter to those creating them.
That is also the price of the accounting profession refusing to recognise that these costs exist and so not requiring that companies make provision for dealing with the cost in their corporate financial statements, as sustainable cost accounting would do.
That is the price we pay for setting up an economic system blind to everything but the upward redistribution of wealth in pursuit of the relentless demand for growth in our gross domestic product (GDP), however inadequately that is defined and accounted for, and however indifferent that measure is to the distribution of the resulting gains within our society.
We have been deliberately blind to the destruction of our life support systems and have pretended that the cost of their destruction does not exist.
We now have yet another government that appears to share the indifference of previous governments to this issue.
For how long can this go on?
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Whether it is car manufacturers marking their own pollution homework or the water companies choosing consciously to do less work but take out more money from the operation, what we have is in reality the political failure to help keep the provider’s part of the deal.
That part of the deal was to regulate – to keep some sort of oversight on behalf of the commons going – whilst these assets were privatised – public corporations designed as such to control the quality of our water to uphold the harsh lessons we learnt from when we didn’t have them.
I’m all for the water companies being subject to these actions but if it were me I’d want the regulator hauled in and public inquiry and the whole lot sacked, ripped up and started again.
This is an abject failure of regulation and of government. We were told it would lead to more investment, lower bills and innovation.
Instead the only innovation is really just in how they got out of doing what needs to be done or even just the job itself.
Nationalisation is the only answer. But what will stop us is all the bullshit about tax and the government having ‘no money’.
So, as a result, nothing will change. We are stuck and ransomed by Neo-liberal lies.
It is not fair to blame regulators for this mess. The reality is that they have been deliberately given inadequate funding and powers as part of the privatisation process. If the full costs of proper oversight had been included in the sell-off proposals it would have been starkly obvious that privatisation made absolutely no financial sense.
Two points:
I’ve not heard any regulators coming out and telling the truth – have you?
Secondly, the regulators are representatives of the politicians that created them. They are joined at the hip, whether you like it or not and will be pro-marketeers I guarantee it.
If they felt otherwise, they would not do the job.
Regulatory capture: ” a form of corruption of authority that occurs when a political entity, policymaker, or regulator is co-opted to serve the commercial, ideological, or political interests of a minor constituency, such as a particular geographic area, industry, profession, or ideological group” https://en.wikipedia.org/wiki/Regulatory_capture
Recommended video “How Big Oil Conquered the World (Documentary)”
https://www.youtube.com/watch?v=Q6r8nkxCKO4
To your further point about the economic system ignoring externalities, on Wake Up To Money BBC Radio5 this morning, there was an interview with the ex-boss of Superdry.
He was very animated about the Chinese company Shein – which does direct to consumer mailing of clothes from China to individuals in the UK, thus avoiding import taxes, possibly VAT, and other constraints that clothing companies in the UK have to operate under when they sell on clothes from China.
The HMRC rules were designed to allow an individual in one country to send a gift to an individual in another country without incurring redtape and extra costs. So if below £39 no duty or VAT. Between £40 and £135 no duty, but VAT @ possibly 29%, and over £135 all taxes apply. Most clothing on Shein are well below £39, so if sent in individual packages will not incur any additional costs (except of course the huge environmental externalities, which everyone will end up paying and not in monetary terms but in quality of life terms!).
You know what this looks like……
100% adulterated pure concentrated evil!
This is what use to be called the Underground Economy in the USA and referred to drug dealers, domestic workers, childcare workers, lawn service workers and minor home repair workers not paying proper taxes. It boggles the mind to know multi-national companies are now engaging in the Underground Economy.
Shein has a huge presence in the USA.
I had a weird dream last night.
I was the newly-elected minister of finance for Ireland after my party (fictive) won a landslide in the next election.
I was chairing a meeting of Irish banks to explain my policies and threatened them all with a withdrawl of their license if they didn’t:
Split their retail and investment activities thereby losing the bail-out on investment banking losses
Remove all fossil-fuel and armaments investments and products from their portfolios
Stopped investing/promoting in off-shore / tax haven products
I dream ideaologically sometimes!
The way companies are set to to fail, as follows:-
The CEOs bonas is based on the share price so he uses the profit to buy the companies shares thus increasing their price, BONAS. Once there is no profet the company borrows money to buy more shares thus increasing the share price, more BONAS. Repeat unto bankruptcy.
In answer to your last question, I think it can go on until some kind of bitter end. Around the world we see that governments can treat their populations with abhorrent cruelty, there is no reason why such appalling outcomes will not occur. It’s either Jameson or Zizek who said that it’s easier to imagine the end of the world than the end of capitalism, and in that vein Mark Fisher said that the feeling that meets these times should be one of revolutionary pessimism. He also spoke of the failure of the left to overcome capitalist desire in his lectures on post-capitalist desire. Liberalism has enshrined in law the protection of private property against the entire world, and ensured what Wolfgang Streeck refers to as unfettered consumption, that the economy, which is simply politics in action, is placed beyond the reach of democracy. There are no mechanisms for change, only for intensification. Change won’t be managed, it will be the result of catastrophe, since there is nothing, short of revolution, which itself would be catastrophic, that will persuade anyone with power and their eye on wealth to steer a different path. The last hope for something even marginally different in the UK was 2019. That change wasn’t allowed, and it won’t be allowed in future. At some point, we may have to fully acknowledge that there can be no peaceful route to a different world. My guess is that this is all too late, the ideological landscape precludes any form of meaningful solidarity. As Aaron Bastani said, however, as consolation people do have nice kitchens.