Time to admit that privatisation of national utilities isn’t working?

OurKid1

I've always thought that water, as a minimum, should be in public ownership and also should be provided free at the point of use, being essential to life. I think it should be funded, as the NHS is, from taxes. I'm aware that increasing taxes is opening a whole can of worms, but I've never understood why it is not part of that system.

Surely it makes sense to provide it at cost to those who use it, so there is little or no funding from taxation. Providing anything free at the point of use is far more likely to lead to wastage. And it takes no account of heavy users such as those with pools, large gardens, agriculture or industry - they should be paying the same per unit as domestic users but I don't know if they get a lower rate now?
For those who are really hard up it makes sense to increase their benefits, rather than provide water free for everyone,

cc

Germanshepherdsmum

Nationalisation without compensation to shareholders would be theft if the shares have a value,

Fortunately they may be going into liquidation so the value would be reduced.

The unfortunate thing is that pension funds are major shareholders so pension pots here and abroad will take a hit. They and sovereign government shareholders will fight tooth and nail to preserve their investments. Currently shares are trading at just under 94p so there is considerable underlying value there. Liquidation is unlikely - administration more so.

cc

OurKid1

I've always thought that water, as a minimum, should be in public ownership and also should be provided free at the point of use, being essential to life. I think it should be funded, as the NHS is, from taxes. I'm aware that increasing taxes is opening a whole can of worms, but I've never understood why it is not part of that system.

Surely it makes sense to provide it at cost to those who use it, so there is little or no funding from taxation. Providing anything free at the point of use is far more likely to lead to wastage. And it takes no account of heavy users such as those with pools, large gardens, agriculture or industry - they should be paying the same per unit as domestic users but I don't know if they get a lower rate now?
For those who are really hard up it makes sense to increase their benefits, rather than provide water free for everyone,

It’s impossible to provide water - and sewage treatment and disposal - free without vast increases in taxation, and as cc says, consumers of these services vary tremendously. I agree that if anything is provided free it will be wasted. We cannot afford that with water.

Lots of comments BUT all totally forget why Industries were de-nationalised in the first place. The Railways etc were de-nationalised as the UNIONS were holding the populous to RANSOM. The Leaders of he Unions were Running the Country for Their benefit. They told the Government what to do. The Water Companies wer de-nationilised as considerable Investment was needed. The shareholders shold be called upon first and they need to ensure that Thames Water Management are doing the jobs they are paid to do.

Trurider1

Lots of comments BUT all totally forget why Industries were de-nationalised in the first place. The Railways etc were de-nationalised as the UNIONS were holding the populous to RANSOM. The Leaders of he Unions were Running the Country for Their benefit. They told the Government what to do. The Water Companies wer de-nationilised as considerable Investment was needed. The shareholders shold be called upon first and they need to ensure that Thames Water Management are doing the jobs they are paid to do.

Well, that's a point of view, but an alternative one is that people haven't forgotten at all, but instead see the situation as one where the government were trying to force the workers to accept low pay and conditions, and they fought back.

The Water Companies wer de-nationilised as considerable Investment was needed.

That didnt work out very well, though!

The railways were nationalised for the same reason.

It really is a matter of shame that our nationalised industries were sold off to foreign countries because they had been let go to rack and ruin and needed upgrading.

I thought Blair would reverse water privatisation at least. ☹

The railways were nationalised for the same reason.

De-nationalised!
Sorry, listening out for a grocery delivery.

I’m not sure any were initially sold to foreign investors but I may be wrong. Certainly foreign investors became involved.

Trurider1

Lots of comments BUT all totally forget why Industries were de-nationalised in the first place. The Railways etc were de-nationalised as the UNIONS were holding the populous to RANSOM. The Leaders of he Unions were Running the Country for Their benefit. They told the Government what to do. The Water Companies wer de-nationilised as considerable Investment was needed. The shareholders shold be called upon first and they need to ensure that Thames Water Management are doing the jobs they are paid to do.

I'm guessing that the major shareholders of Thames Water are the institions (pension funds and the like) at home and abroad. As long as they are getting good dividends they won't take on the management - and the management remuneration and dividends have probably been too good to leave enough for the investment in infrastructure which has always been required.

Germanshepherdsmum

I’m not sure any were initially sold to foreign investors but I may be wrong. Certainly foreign investors became involved.

You're right, the shares were issued to UK shareholders first. However some of the shares (and indeed the some utility companies such as EDF (French) are totally foreign owned).

Trurider1

Lots of comments BUT all totally forget why Industries were de-nationalised in the first place. The Railways etc were de-nationalised as the UNIONS were holding the populous to RANSOM. The Leaders of he Unions were Running the Country for Their benefit. They told the Government what to do. The Water Companies wer de-nationilised as considerable Investment was needed. The shareholders shold be called upon first and they need to ensure that Thames Water Management are doing the jobs they are paid to do.

The shareholders have already been called upon Trurider1, that’s why we are where we are?

I find it most shocking that so many of our privatised utilities have been run so badly that some are honestly no longer fit for purpose. And such profit as there is has been used for dividends and excessive management payments rather than ploughed back to maintain the systems.
The government have taken some train services back but they work on fixed term contracts I believe. No such safeguards were put in place for Gas, Electricity and Water companies.

Germanshepherdsmum

I’m not sure any were initially sold to foreign investors but I may be wrong. Certainly foreign investors became involved.

Actually, yes, I think the shares were offered to the British public because I had friends who bought some in several utilities.

Casdon

Trurider1

Lots of comments BUT all totally forget why Industries were de-nationalised in the first place. The Railways etc were de-nationalised as the UNIONS were holding the populous to RANSOM. The Leaders of he Unions were Running the Country for Their benefit. They told the Government what to do. The Water Companies wer de-nationilised as considerable Investment was needed. The shareholders shold be called upon first and they need to ensure that Thames Water Management are doing the jobs they are paid to do.

The shareholders have already been called upon Trurider1, that’s why we are where we are?

If you have shares in a limited company then if you have paid for your shares in full you cannot be called upon to invest more money. You might be invited to buy more shares and you may or may not take up the offer, but you cannot be made to contribute towards the company’s debts unless you have also assumed the role of director or shadow director and the company has been trading whilst insolvent.

This is what inews had to say about shareholders involvement.

‘Last year, the owners of Thames Water agreed to invest £500m in the company, marking the first equity injection since privatisation, and pledged to invest a further £1bn.

Against this backdrop, Thames Water made the shock announcement on Tuesday that its CEO Sarah Bentley has resigned and reports soon emerged that the Government was making contingency plans to place the company into a special administration regime.

While the exact circumstances around the latest developments remain unclear. Experts suggested that this could be because Thames Water’s shareholders are unwilling to pump more money into the business.

Chris Goodall, an author and researcher who has written about the impact of private equity on the water industry, speculated that Thames Water may be struggling to meet its interest commitments to shareholders due to soaring interest rates, and that shareholders might be unwilling to put more money into the company until it becomes clear Thames Water is not “fundamentally unviable”.’

Callistemon21

Germanshepherdsmum

Nationalisation without compensation to shareholders would be theft if the shares have a value,

Yes, the shares need to be purchased but are they worth much anyway?

Water should never have been privatised.

👏🏻👏🏻 Totally agree.

Am on the fence about nationalising other utilities tho.It gets rid of competition.

Was appalled when Thatcher’s regime privatised water companies. We die without clean water! It’s not something you can opt in and out of, such as a phone line. It’s not a money-spinner, but a basic requirement of life. Yes, re-nationalise all of them!

I'd like to re-nationalise them, certainly gas and electric, but I think to be realistic it can only be achieved "bit by bit".

I think rail is the next priority before the trend continues of more and more road/car use and how much of a mess the railways are in, when to would make such a difference to people's lives to have a viable - and affordable rail system, and proper use of rail for carrying goods.

OurKid1

I've always thought that water, as a minimum, should be in public ownership and also should be provided free at the point of use, being essential to life. I think it should be funded, as the NHS is, from taxes. I'm aware that increasing taxes is opening a whole can of worms, but I've never understood why it is not part of that system.

So, those people with swimming pools in their back gardens or int heir homes, like the PM would have free water?

Here in France they are carrying out aerial surveys to check on any unreported swimming pools. Large fines if you one that's unreported.

The shares in the utilities were offered at a discount because the Tory govt wanted the UK to become a nation of shareholders. Many people applied for shares and as far as can remember the allocations were restricted. Most of the small shareholders sold their shares fairly quickly and made good profits. The purchasers were institutions in the main.

Oreo

Callistemon21

Germanshepherdsmum

Nationalisation without compensation to shareholders would be theft if the shares have a value,

Yes, the shares need to be purchased but are they worth much anyway?

Water should never have been privatised.

👏🏻👏🏻 Totally agree.

Am on the fence about nationalising other utilities tho.It gets rid of competition.

What competition? I think that those who live in the Thames Water region do not have a choice. Nor do those who live in the other water regions.

I remember my Dad buying shares in BT.

Dinahmo

Oreo

Callistemon21

Germanshepherdsmum

Nationalisation without compensation to shareholders would be theft if the shares have a value,

Yes, the shares need to be purchased but are they worth much anyway?

Water should never have been privatised.

👏🏻👏🏻 Totally agree.

Am on the fence about nationalising other utilities tho.It gets rid of competition.

What competition? I think that those who live in the Thames Water region do not have a choice. Nor do those who live in the other water regions.

I thought Oreo meant other utilities such as gas and electricity.

Dinahmo

Oreo

Callistemon21

Germanshepherdsmum

Nationalisation without compensation to shareholders would be theft if the shares have a value,

Yes, the shares need to be purchased but are they worth much anyway?

Water should never have been privatised.

👏🏻👏🏻 Totally agree.

Am on the fence about nationalising other utilities tho.It gets rid of competition.

What competition? I think that those who live in the Thames Water region do not have a choice. Nor do those who live in the other water regions.

Read my comment again.
I want water to be nationalised. Not sure about gas or leccy as if there is no competition you can’t shop around for good deals.
Water could be run completely by the state.Possibly the other utilities but just not sure.
Railways could be taken back by the state as they’re now so badly run there’s no case for them to stay privatised.

Of course the shareholders should take a hit if Thames Water has to be nationalised or, less likely, goes into liquidation. They bear some responsibility for that because they failed to take enough interest in what their company was doing. It's not enough to simply sit back and enjoy the dividends if you are a massive institutional or sovereign shareholder as the majority are.