Water Pollution -“ A National Disgrace”? A case for renationalisation?

There are actually lots of issues with Scottish Water too.
www.bbc.co.uk/news/uk-scotland-6609651

I am in favour of public ownership ultimately, but that in itself won’t resolve the issues unless there is also a whole new strategic direction and infrastructure investment, UK wide.

www.scottishwater.co.uk/About-Us/Who-We-Are

I'll just leave this here without comment for anyone who is interested in how a state owned Water Company can function well.
I will however have plenty to say if the UK government use UK wide tax revenues to fund privatisation of England only Water Companies

If a company is being acquired its shares have to be purchased at whatever is their then value

In the case of Thames Water, that’s zero - the shares will very soon be worthless.

Thank you Tin Soldier for putting the whole water issue in the context it the UK borrowings.

Shareholders are the last creditors to be paid when an insolvent company is wound up, along with other unsecured creditors. If a company is being acquired its shares have to be purchased at whatever is their then value - or frequently well above that figure in order to secure the purchase. They may not have purchased their shares directly from the company, but the existence and value of those shares is of prime importance to the company as the share value is fundamental to the company’s worth.

Thanks Maizie D

Shareholders are the final group to be paid. Because they have taken a business risk in providing money to the company, they are not entitled to a distribution until all other creditor groups have been paid

Most shareholders haven't provided any money at all to the company unless they bought shares when the company was started or floated on the stock exchange. They might also have bought extra shares direct from the company if the company has issued them for further capitalisation. Only then will the purchase money for the shares go straight to the company. After the initial issue the money paid for shares bought on the secondary market goes to the seller of the shares, it goes nowhere near the company. Many share owners have no interest at all in the company apart from the amount of dividend they receive.

And, while we're at it, though it really relates to another thread, most shareholders voting through high pay for CEOs will be the institutions holding very large quantities of shares who are indifferent to the pros and cons of inflated CEO pay. Small shareholders, however much they might want to reduce pay increases, have no power against these big blocs.

We've had a lot of discussion here about ownership and finance but we haven't addressed how to actually stop sewage going into the rivers. When I was a child in the 1950s we had 'deep drainage' put in and instead of using an outside privy, which was emptied weekly and taken away, we now had a flushing, indoor loo. The rainwater and the sewage now all go to the treatment works, which can no longer cope with the volume. We used to have a bath once a week (in front of the fire), now everyone, apart from me, seems to shower everyday, and wash all their clothes after wearing them once. We all have a part to play in this and the only remedy is to direct rainwater direct into rivers and only the household water, sewage and waste from sinks to go to the treatment plants. Every street will need to be dug up, additional drains laid and vast sums of money spent.

Shareholders are the final group to be paid. Because they have taken a business risk in providing money to the company, they are not entitled to a distribution until all other creditor groups have been paid

This is from liquidation information. Given that Thames Water has debts of £millions (or is it billions), these debts will be paid off first, leaving, in all probability, nothing for the shareholders. Good!

The goverment’s current fiscal rules are for debt to be falling as a percentage of GDP in the final year of it’s five-year forecast. The annual budget deficit is not to exceed 3% of GDP over the same time period.

The value of Thames Water is expected to plummet to £1.9 billion with debts of £19 billion - say £21 billion in total. It’s a drop in the ocean in terms of the UK’s £2.5 trillion national debt - less than 1%.

www.theguardian.com/business/2024/jan/02/thames-waters-second-largest-investor-slashes-value-of-its-stake

£21 billion could be borrowed with little difference in overall debt and would only need a small amount of economic growth to not break fiscal rules.

As a comparision, over £123 billion is held in Premium Bonds by 24 million bond holders. Half of the £450 million monthly prize fund goes to the around 1.6 million bond holders who own the maximum holding. It’s a very unfair distribution of the fund. Even those with the maximum holdings and median luck receive less than they would earn in a bank. The vast majority, over 22 million bond holders have loaned money long-term to the government and receive nothing or next to nothing in return.

Thames Water supplies a quarter of households in what is one of the wealthiest parts of England. Assuming PB holdings are fairly equally distributed around the UK, say a fifth are held by people in the TW region - say around £30 billion taking into account the relative wealth in the area.

Here’s a radical idea for a Saturday morning. Offer all the Thames Water PB holders (or indeed all PB owners) an opportunity to covert their holding into buying out the company, paying down the debt and providing working capital. In return for that, they receive modest dividends, discounted water bills and a say in running the company. This would also decrease government debt.

The big PB winners probably wouldn’t go for it but the vast majority, the smaller holders who are realistic about their chances of winning anything other than the occasional £25, just might.

Of course - it won't happen.

Alternatively, in the great scheme of things, an extra £21 billion is a small amount of money for the goverment to borrow to take the company back into public ownership but goes against the grain of Tory politics.

The water boards should never have been privatised as monopolies. We now face remedies which will result in the costs being paid by the taxpayer and/or the consumer but not the shareholders who would likely be compensated if we re-nationalised. It's another Tory/Thatcher mess for Labour to inherit.

LizzieDrip

^Well they wouldn’t have to buy out the shareholders if the shares are worth nothing and the company is bankrupt.^

Exactly Vegansrock. I don’t understand the argument by GSM that the government would ‘have’ to buy out the shareholders. As said in a previous post, the company belongs to the shareholders. If the company goes bankrupt, the shares are worthless so the shareholders own nothing. Therefore they are entitled to nothing from the government when it takes charge of the company. I say, let this happen. They wanted privatisation … they’ve creamed off the financial rewards of this for years; they’re now experiencing the downside. As we all know ‘the value of shares can go down as well as up’!

Yes, they've made enough out of this monopoly.

Where's the so-called Competition Commission in all this?

Well they wouldn’t have to buy out the shareholders if the shares are worth nothing and the company is bankrupt.

Exactly Vegansrock. I don’t understand the argument by GSM that the government would ‘have’ to buy out the shareholders. As said in a previous post, the company belongs to the shareholders. If the company goes bankrupt, the shares are worthless so the shareholders own nothing. Therefore they are entitled to nothing from the government when it takes charge of the company. I say, let this happen. They wanted privatisation … they’ve creamed off the financial rewards of this for years; they’re now experiencing the downside. As we all know ‘the value of shares can go down as well as up’!

Well they wouldn’t have to buy out the shareholders if the shares are worth nothing and the company is bankrupt. Why should the customers have to pay for the incompetence and greed of those who have failed in their statutory duties and only been interested in a fast buck? Maybe cut back on bungs to party donors, vanity projects and chase tax evaders in order to pay for a decent service. We should not tolerate raw sewage in our waterways for any price. How about extracting the fines these companies should be charged for starters?

Katie59

The government could take on the existing loans, run them as efficiently as possible, there may be some that have penalty clauses or some may be unfavourable. Then provide the extra money needed to improve the water industry to the standard we all want, it cant be done in 1 yr the aim should be to get the job done in 10yrs.

Yes, bills would have to go up, but if we want improvements we have to pay for them, low income groups can have benefits increased to make up the difference.

The government would have to buy out the shareholders, take on the debt, fund improvements and increase benefits so that people can pay higher bills. Really? Taxes as well as water bills would go up. And highly paid senior managers would still be needed.

I am a Thames Water customer and since they broke my water meter and haven’t replaced it in 12 months I am charged £62 per month. When we had a meter our charges were around £100 per month that’s for 2 of us. So I’m not in a rush for them to replace our meter.

According to the NHS figures, waterborne diseases have risen by 60% since 2010 and the excessive discharge of sewerage into our waterways/sea.

I live on the south coast, and there is a lot of word of mouth about dogs getting sick after swimming in the sea or river. What on earth is it doing to the wildlife!

Diseases such as Weil’s disease which can enter into the body through the normal way like mouth, nose, eyes etc, but also through cuts etc affects kidneys, liver etc. there is also a sharp rise in typhoid being reported.

The government could take on the existing loans, run them as efficiently as possible, there may be some that have penalty clauses or some may be unfavourable. Then provide the extra money needed to improve the water industry to the standard we all want, it cant be done in 1 yr the aim should be to get the job done in 10yrs.

Yes, bills would have to go up, but if we want improvements we have to pay for them, low income groups can have benefits increased to make up the difference.

nanna8

The trouble with most governments, especially the UK just now, is they couldn’t run a cake stall let alone a vital water supply.

Well, they probably could - but they'd nab all the best cakes for themselves and sell you the less appealing ones at an inflated price.

The trouble with most governments, especially the UK just now, is they couldn’t run a cake stall let alone a vital water supply.

Katie59

It comes down to the same thing and the returns come in month by month immediately.

In the scale of spending water is cheap, an unmetered supply is just over £30 a month for water rates including sewerage I pay nearly £40 a month for my broadband, plus £20 mobile we don’t pay for extra TV Chanel's if we did it would be over £100 a month for tech services.

We simply have to pay the true cost of secure water services.

Have you calculated the returns coming in month by month (I assume through water and sewerage bills)? Would those receipts cover acquisition costs? What about the improvements needed to the infrastructure?

As you say, we are not paying the true cost of water (and sewerage) services. An increase in charges will be needed whether the industry is privatised or nationalised.

Callistemon21

^In the scale of spending water is cheap, an unmetered supply is just over £30 a month for water rates including sewerage^

Ours is more than that but we've all had a £10 refund because the reported data on leakages and usage was wrong.

I'd rather they put that £10 towards cleaning up our filthy rivers.

Mine’s more than double that, no meter. I’m moving to wherever Katie59 lives, I think.

In the scale of spending water is cheap, an unmetered supply is just over £30 a month for water rates including sewerage

Ours is more than that but we've all had a £10 refund because the reported data on leakages and usage was wrong.

I'd rather they put that £10 towards cleaning up our filthy rivers.

It comes down to the same thing and the returns come in month by month immediately.

In the scale of spending water is cheap, an unmetered supply is just over £30 a month for water rates including sewerage I pay nearly £40 a month for my broadband, plus £20 mobile we don’t pay for extra TV Chanel's if we did it would be over £100 a month for tech services.

We simply have to pay the true cost of secure water services.

So you’re in favour of creating or borrowing vast sums of money without tax receipts coming down the line to back it, Katie? Or would you raise taxes to back it?