As long as the shareholders don't suffer.

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Psamathe

Über Member
Interesting report. Government keep claiming it too expensive to nationalise the water companies but sounds like that might not be the case
Public ownership of England’s water companies could cost close to zero, says thinktank
Exclusive: Common Wealth report argues debt, pollution and underinvestment justify process known as special administration
...
Writing for the thinktank, Ewan McGaughey, professor of law at King’s College London, said that while a figure of £99bn was commonly cited as the cost of taking over the industry in England, this was based on an estimate from a thinktank paid for by water companies.
...
It goes on to say that when debt levels of water companies are taken into account, for example Thames Water is about £20bn in debt, it would be possible for the government to argue that their appropriate value in law was notably less, even close to zero.
...
Ian
 

C R

Guru
Interesting report. Government keep claiming it too expensive to nationalise the water companies but sounds like that might not be the case

Ian

You misunderstand, it is too expensive for the VCs, they may have to go without two of their fortnightly holidays.
 

Psamathe

Über Member
Creditors prepared tio invest but
Creditors admitted their plan hinges on a considerable leniency from Ofwat, the government’s water regulator for England and Wales, over future fines for environmental failings.

The creditors have requested that Ofwat set Thames Water lower environmental standards – and even for it to let the water company off without fines for past breaches of its licences and permits.
(from https://www.theguardian.com/busines...r-up-5bn-as-part-of-emergency-turnaround-plan)
(My bold)
To me this beggars belief. I think the only viable way forward is full public ownership. We're paying for it anyway so why not own it and operate it as a utility rather than a source of profits/dividends.

Ian
 

icowden

Shaman
To me this beggars belief. I think the only viable way forward is full public ownership. We're paying for it anyway so why not own it and operate it as a utility rather than a source of profits/dividends.
Agreed. There is very strong evidence that the current regime just allows foreign companies to extract all of the taxpayers money. UK water companies all have £bns of debt because the value was extracted by parent companies in the form of dividends. Thames Water has a £14.3bn debt but has paid out £7.2bn in dividends .

https://www.theguardian.com/busines...w-privatisation-drained-thames-waters-coffers

Govt should nationalise and tell the owning company they can keep the debt.
 

Psamathe

Über Member
Govt should nationalise and tell the owning company they can keep the debt.
My thought was to fine them maximum amount for every illegal violation until they are bankrupt they buy the now worthless company for 1p. But even doing it by maybe more reputable means it still looks like it won't cost much (see above Yesterday at 11:19. But Labour seem determined to use the valuations as presented by the Water Companies themselves and no surprise, that's a lot of money. No idea why Labour are so ready to listen to vested interests and paid lobbyists rather than independent experts (maybe because independent experts don't hand them free concert or football tickets, buy them clothes, etc.?)

Ian
 

icowden

Shaman
No idea why Labour are so ready to listen to vested interests and paid lobbyists rather than independent experts (maybe because independent experts don't hand them free concert or football tickets, buy them clothes, etc.?)
They do seem to have forgotten that they are the party that is supposed to not engage with lobbyists and nationalise things without caring about the private companies.
 

Psamathe

Über Member
More games to avoid scrutiny by our politicians, tricks to look like they are doing something when they can't be held to it
Except our next General Election must be held before August 2029 so come the election and they haven't met their commitment then ... it's not 20230 yet!

They must think we are real suckers. If they were serious they'd be undertaking commitments that they can be held to account on, commitments that can be monitored eg x% (on todays figures) per year reduction.

Ian
 

Psamathe

Über Member
Water companies are making the Government/Regulators look like fools (which in this case they probably are)
Southern Water nearly doubles CEO pay to £1.4m despite bonus ban
...
Southern Water was last month banned from paying bonuses with immediate effect after a sewage leak in August 2024 in the New Forest in Hampshire that fell into the most serious category.
...
The increase to Gosden’s pay package is likely to be controversial as it emerged weeks after Southern Water was forced to ask shareholders, led by Macquarie, for £1.2bn to avoid a breach of its regulatory licence because of unsustainable debts.
...
Southern had already been allowed a 53% bill increase for its 4.7 million customers
Ian
 
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Psamathe

Über Member
They've been taking the weewee for a long time now, so probably think they might as well extract as much cash as they can while they still can. There don't seem to have been any prior repercussions for doing so.
But then Labour's promised and delivered Water (Special Measures) Act was full of loopholes such that one must assume it was deliberate (because incompetent raises even greater concerns).

eg bonus bans can only be applied to the top/very senior staff like Chief Executive/Chief Financial Officer/Chairman so didn't stop eg Thames Water paying £2.4m bonuses in April (remembering the financial state of Thames Water).

Seems all the water companies have to do is call the payments "retention payments" rather than "bonuses" and they get round Labour's new rules ... simples. Or just double pay (as Southern Water have done). Talk about (deliberately?) poor useless legislation.

Ian
 
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Psamathe

Über Member
The environment secretary, Steve Reed, said: ...
“A single, powerful regulator responsible for the entire water sector will stand firmly on the side of customers, investors and the environment and prevent the abuses of the past.”
(My bold)
Why is the new regulator to be acting in the interests on the investors? They are the ones who have been doing very well historically, their dividends approximately matching the debts the Water Companies have accumulated. So the deividends they've taken create the debt we then have to pay for!

Long beyond time the entire industry was re-nationalised and for that to happen Government need to stop listening to Water Company lobbyists who present ludicrous values for the all but bancrupt companies. Independent economists keep saying the Water Companies own valuations are ludicrous but Government seems to happily accept those ludicrous figures!

And even if there is a valuation more than £0 there is no legal obligation to pay compensation to anybody (and in the past such payments have not been made https://www.clivelewis.org/uncatego...estoring-water-companies-to-public-ownership/

Or pay shareholders back what they've put in
If we gave the shareholders back what they put in (i.e. the equity value of the shares) it would cost just under £15 billion to buy back the water companies. We would save around £2.5 billion a year because we wouldn’t have to pay out shareholder dividends and borrowing costs are lower in the public sector. Bringing water into public ownership pays for itself in around 6 years on that basis.
We're all paying anyway, either through taxation or through paying much higher waterb bills. We're pay whatever happens, just current system means we're paying for shareholder dividends and ludicrous salaries/bonuses. And those employees demanding such massive payments to retain them or they'll leave are the ones whose decisions have resulted in our rivers becoming open sewers, the individuals who have oversean the lack of investment whilst directing the money to shareholders and themselves that we are now all going to have to pay for.

Ian
 
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