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

Are we terminally stupid? I fear we are! Or rather successive governments have been. On what planet does having your essential services privatised and especially in foreign hands make good sense? I don't agree with privatisation at all but at the very least I disagree with foreign ownership of our basic utilities. They have no interest in how decisions affect the British public.

I thought Tony Blair would at least halt the privatisation of the water industry.

When Margaret thatcher privatised utilities, they were all debt free . Since then a succession of foreign companies have been allowed to invest, with no limit to their securitisation.

The original shareholders were always going to sell to make a quick profit to pay for that little trip to Benidorm or that nice new kitchen.

Now the big boys move in . And they all do the same thing - asset strip until there’s nothing left . Politicians smooth things over and then walk into directorships. a few paltry donations to the party in control ensure the continued gravy train.

A comparable analogy is the ownership of Manchester United by the Glazer family and yet in the media nothing but opprobrium was heaped on these crooks . The difference being that their assets contained to rise as the mania for football rose over their tenure.

This is just plain wrong . The greed of these companies is insatiable. We need to break the system because the only losers in this inevitable cycle are the customers who get to hold the parcel when the music stops. And that’s you and me.

“Are we terminally stupid? I fear we are! Or rather successive governments have been. On what planet does having your essential services privatised and especially in foreign hands make good sense? I don't agree with privatisation at all but at the very least I disagree with foreign ownership of our basic utilities. They have no interest in how decisions affect the British public.”

Agreed Rosie51 👏👏👏

What asset stripping has taken place in the water industry Urms? A company needs assets against which to borrow money.

They have just let it go to rack and ruin.

The original shareholders were always going to sell to make a quick profit to pay for that little trip to Benidorm or that nice new kitchen
I cannot imagine my friend going on a little trip to Benidorm. Ever. Perhaps she'd have had a new kitchen if she hadn't died.

it does need to be privatised but after its bankrupt so its cheaper. Similar could be said for most privatised services, a friend worked for a youth autism service run by Virgin & they were forever trying to cut costs by insisting visits were done via zoom, this doesn't work for people, you need to be in the room with them to see non-verbal clues, a glance aside at a difficult topic perhaps, a slight tremor in a voice, trembling when asked something they don't know how to answer.
It will come as no surprise to hear I loathe this gov't and can't wait to vote Labour to get proper public service back, they are going to keep using private companies but will check each contract for value for money, so no huge payouts for executives again

It’s not the fault of the water companies it’s the polititians of successive governments allowing it to happen, even now they are passing the buck. They COULD make Thames bankrupt default on the loans, but then they have to find the extra investment themselves and take responsibility for the industry, plus nobody would lend money for all the other private finance utilities.
Thats why it’s not going to happen

How does a company that values itself at around £2.75 billion rack up £14 billion of debts? Would any lender give me a 500% mortgage on my home?

There are certain "Investment Banks" who have spent the last 25 years selling complicated and extremely expensive (for the utilities) debt to the UK's utility companies. In exchange for some up front cash they have given away much of their future revenue.

The debt can never be repaid without extraordinary profits. To achieve these profits the companies have to charge insane amounts or cut back on their sensible and necessary sustaining capital expenditure. Even with such drastic measures they are stuffed. The debt isn't going away. It is disingenuous to suggest that the money is needed for upkeep and improvements...they have already had the money and spent it on bonuses.

The villains are ignorant executives who allowed themselves to be blinded by the rapacious banks and the law for allowing such companies (and councils etc) to behave so foolishly with what is ultimately our money!

I think the BANKS have been complicit. Greedy vultures. So not just politicians. Would Labour be any better?

Katie59

It’s not the fault of the water companies it’s the polititians of successive governments allowing it to happen, even now they are passing the buck. They COULD make Thames bankrupt default on the loans, but then they have to find the extra investment themselves and take responsibility for the industry, plus nobody would lend money for all the other private finance utilities.
Thats why it’s not going to happen

That’s blinkered. How are you justifying the huge shareholder bonuses?

Exactly. Asset stripping isn’t only the disposal of tangible assets. It’s any means by which value is stripped out of a company.

Macquarie Bank aka the Vampire Kangaroo is known for buying up British companies, running down their capital base and loading the companies with large debts, while extracting dividends and engaging in large scale tax avoidance.

Which is exactly what they did with Thames Water. It’s what private equity firms have done to care homes over and over again so that a big chunk of what self-funders and local councils are paying in care fees isn’t going on care at all but to service massive leveraged debt.

Our basic rights, the right to clean water and the right to care when we are most vulnerable are seen as money-making vehicles for these vultures.

Urmstongran

How does a company that values itself at around £2.75 billion rack up £14 billion of debts? Would any lender give me a 500% mortgage on my home?

They have creditors as well as fixed assets, and it’s normal business practice to include those in the assets. You don’t supply any supporting evidence for your figure and I’m not going to go looking for the latest accounts. Remember that any net value is excess of assets over liabilities.

Banks would not make loans which could never be repaid. They are not in the business of giving money away. Commercial finance is very sophisticated and it’s clear that you don’t understand it. I’m making a statement of fact, not being rude. The executives aren’t ‘ignorant’, nor are the banks ‘greedy’ - they lend at commercial rates taking into account known risks and specialist lawyers are used to negotiate and document the loans.

The money in question is not ‘ours’. Companies belong to their shareholders.

Casdon

Katie59

It’s not the fault of the water companies it’s the polititians of successive governments allowing it to happen, even now they are passing the buck. They COULD make Thames bankrupt default on the loans, but then they have to find the extra investment themselves and take responsibility for the industry, plus nobody would lend money for all the other private finance utilities.
Thats why it’s not going to happen

That’s blinkered. How are you justifying the huge shareholder bonuses?

The polititians negotiated the contracts but failed to control the way they were implemented, most of them are clueless about commercial finance. There are unscrupulous investors who will take every opportunity to gain it you let them it happens all the time, give them the power they will use it.

Which is why I believe private finance is a bad idea, sometimes you might gain, often you won’t.

private finance is a bad idea

What other sort do you have in mind? Or do you mean private equity investors, or public finance initiatives?

Surely a monopoly is a different case? I have no choice as to where to " buy" my water and sewage. If I think that my grocer / energy company/ hairdresser is not acting responsibly or paying the chief executive too much I can ( and do) vote with my feet, or my cheque book.

Katie59

Casdon

Katie59

It’s not the fault of the water companies it’s the polititians of successive governments allowing it to happen, even now they are passing the buck. They COULD make Thames bankrupt default on the loans, but then they have to find the extra investment themselves and take responsibility for the industry, plus nobody would lend money for all the other private finance utilities.
Thats why it’s not going to happen

That’s blinkered. How are you justifying the huge shareholder bonuses?

The polititians negotiated the contracts but failed to control the way they were implemented, most of them are clueless about commercial finance. There are unscrupulous investors who will take every opportunity to gain it you let them it happens all the time, give them the power they will use it.

Which is why I believe private finance is a bad idea, sometimes you might gain, often you won’t.

But as Germanshepherdsmum pointed out, companies belong to their shareholders, and normally when companies go bust, shareholders get nothing. Are you saying that these contracts were written in such a way that there was a guaranteed government bailout once the shareholders had maximised their profits and the company went bust?

I'd like it to be nationalised but cant see how it could be done financially.

Of course it could the government can create/borrow as much money as it needs, then it can directly control and implement the standards and costs needed. No question of third parties ripping off the consumers, who then pay what it costs or some other amount with subsidy from taxation.

There was no problem finding the cash for HS2 with very slim viability justification and now looks like costing double the estimate for half the distance

Private finance is only a short term fix because it spreads the cost over a longer period but ends up costing more

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?

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.

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.

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.

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.