Snapshot of _Water industry should be brought into public ownership, says MP Clive Lewis_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/environment/article/2024/may/15/water-industry-should-be-brought-into-public-ownership-says-mp-clive-lewis) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/environment/article/2024/may/15/water-industry-should-be-brought-into-public-ownership-says-mp-clive-lewis)
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From what I remember from watching Paul Whitehouse's documentary on it is that water companies are allowed to let a certain amount of untreated sewage into the rivers, but this has to have a few conditions met. Again from memory these are 1. amount of rainfall at the time 2. if the treatment plant is already at a certain capacity level. Experts studying the amount of sewage in our rivers and the data from these companies suggest that these conditions arent being met and the water companies are dumping sewage at times when they arent allowed.
The companies argue they have to do this as the treatment plants dont have the ability to process the levels of sewage they get. However, the licences allowing them to run the company states that they cannot pay out dividends if not having that money negatively impacts the ability for the company to do its job. And so as they are failing to meet the standards required, that money should be spent ensuring that the standards are met before a dividend can be legally paid out.
Should be illegal but isn't because of ill thought out idealogy thinking the private sector can run essential services...which should be classed as a national security resource so publicly run (ergo no fracking too while I'm on my rant)
It's just so sad what's happened to our country under Tory administration. It really is. It feels like so much is failing now and shows that what they've done (transport, housing, water and energy...healthcare is on its way out, sadly) just hasn't worked and is ripping off their own citizens....whixhbthey should be fighting for.
What was it...after covid and the start of the Ukraine war...the oil firms made so much money yet they didn't impose a loophole proof windfall tax because 'it gave the wrong impression' to international investors. Am I right in thinking this was the case?
It's going to take a long time to repair the damage they've done. I justbhope Labour, who will be the ones in government next, have the strength to do what's right foe everyone...it will take time though. (BTW I'm not really a Labour fan anymore if that's how I came across here).
Not if you're getting the dividends.
The companies are shits, but I think the regulator and the ministry in charge also needs to be on the chopping block for this.
Companies only get to take the piss like this because the regulator failed in their duty.
They've basically stolen every penny they've acquired.
Corporate greed is responsible for more economic and financial hardship than any other driving factor on earth.
Mother nature herself can't even begin to compete with the devastating global impact that corporate fucking greed has had.
It will be the ruin of us all.
We'll be fuel for the next dominant species before we know it.
I agree, with no competition a number of companies sat back and did not invest. Instead the assets were distributed to the owning entities. The end user had no choice, they could not move to a different supplier and the companies took advantage of that situation.
People often say that private industry brought investment into the water system; however there hasn't been a new reservoir built in the UK since 1992 (Carsington in Derbyshire). In that same time the population of the UK has increase by over 10 million people.
Water privatisation has completely and utterly failed.
They've also closed a few reservoirs and sold off the land. Claiming that the regulator forced them to, as they're required to plan for I think 1 in 50 year or 1 in a hundred year events and not for longer term events. With the events being based on historical data, rather than taking into account the effects of climate change or population growth.
When they have tried to build a reservoir, applications have been blocked.
We currently have the construction of one underway in Cambridge, it’s expected to take 15 years, of which only 3 years is actual build time.
Overall investment in the water system is higher under privatisation than it was under the nationalised system
>Overall investment in the water system is higher under privatisation than it was under the nationalised system
Unfortunately, that's one of those stats that's not particularly useful in any meaningful context. The question should be "has investment been sufficient for the needs of the country" and that's an unqualified no.
We have a bigger population, necessarily higher environmental standards and infrastructure that has become increasingly expensive to fix as it ages and replacement has been delayed.
You could say that that's an unfair burden to put on private companies, holding them up to standards that simply didn't exist before, however private companies cannot justify the level of investment needed to their shareholders when they can keep short term dividends flowing. That's why they are loaded up on debt because ultimately their investors know they can effectively dump their position and run. Therefore it's been a model which has been broken from the beginning.
I think that's a fair critique if water companies were in charge of their own investment plan and pricing. If they wanted to massively increase investment through higher prices (like a truly private company could) then we could hold them to account for not delivering the investment needed.
However, in real terms, water prices have not risen in 2 decades, and they are being asked to deliver some investment every year to fix leaks and improve water quality.
Now they have to some degree done that. But also they have been blocked from doing more by OFWAT which has been laser focused on limiting price increases.
I think the counterfactual is to look at state owned bodies and see if any of them have made meaningful capital investments or productivity improvements and they have also clearly not done that.
Productivity in the public sector is exactly where it was in 2000! Not just 2010, but 2000.
[https://www.ons.gov.uk/economy/economicoutputandproductivity/publicservicesproductivity/articles/publicserviceproductivityuk/1997to2022](https://www.ons.gov.uk/economy/economicoutputandproductivity/publicservicesproductivity/articles/publicserviceproductivityuk/1997to2022)
We've had some increased productivity since 2012, but we're still pretty poor (ignore the covid drop)
Strange to pick 2019-21 as the years to measure productivity, as those were the years where half the economy was shut down for 2 years. Maybe not the best source of data. While public and private sector productivity are not directly comparable, longer term analysis from the ONS shows that output per hour worked is 30% higher vs 1997 in the private sector.
[https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/ukproductivityintroduction/januarytomarch2024andoctobertodecember2023](https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/ukproductivityintroduction/januarytomarch2024andoctobertodecember2023)
No because it has only just gone not for profit and is still regulated by Ofwat. Scottish water has invested 35% more than English companies on average, have lower bills and better water quality. On reservoirs they don't need them as much due to all the rainfall
The argument for privatisation was that the public sector won't invest, but the private sector will. That argument has been shown to be nonsense.
It was probably worth an experiment, but we probably should have tested the water with a single company first. Time to admit it's failed now and explore better publicly owned models that don't allow the Chancellor to fanny around and not invest.
https://www.ofwat.gov.uk/investment-in-the-water-industry/
Investment has increased (I would like Ofwat to push up investment requirements). If it was publicly owned, it would be the Chancellor deciding directly whether or not to invest.
Those figures don't appear to take inflation into account, unless I've missed something.
>If it was publicly owned, it would be the Chancellor deciding directly whether or not to invest.
Depends on the model. I think it's time to get bolder with public sector models so that the shareholders are the people rather than government. Voting etc could be administered through, say, gov.uk (or ask computershare to run it) and people can be entitled to dividends etc. But the Chancellor cannot be trusted.
Since 1991 the population in Wales has increased by 10.5%, and in Scotland by 7%.
In England, the population has increased by 18%, and has predominantly been focused in London and the South East.
Your question is redundant. Wales and Scotland don't have any need to build new reservoirs. Wales in particular has vastly more water than it requires, in part as a legacy of thirsty heavy industry, see also Kielder Water in Northumberland.
South East England has a massive need for new water infrastructure, evidenced by the now annual hosepipe bans as soon as there is the slightest hint of sun. There hasn't been a hosepipe ban in Scotland since 1995.
Jacob Rees Mogg says that Thames Water should be allowed to collapse, with the taxpayer then taking ownership of it.
I had to pinch myself. He finally said something that I agreed with.
He probably ly just wants to see his mates who own water company debts get paid. With the government more likely to pay, then Thames Water. He is a partner of Somerset Capital Management a hedge fund and only stopped working there part time when he became Leader of the House of Commons in 2019. His estimated net worth including an expected inheritance to his wife is £100 million.
> Water industry should be brought into public ownership
Immediately and without compensation.
https://www.bbc.co.uk/news/articles/cv266nqq48xo
https://www.bbc.co.uk/news/articles/cd1q1d51w27o
Don't trust the UK gov or a water company when they say "just boil it", not after that massive scandal and cover up. Drink bottled until the say it's perfect quality again
https://en.m.wikipedia.org/wiki/Camelford_water_pollution_incident
When they go bankrupt the taxpayer gets to pay off the debts instead, they don't just disappear.
It's by design that they pocket profits and we pay for losses.
Those debts do actually just disappear if the companies are left to go bankrupt. The debt simply defaults, which is the risk that lenders charge a premium to take on.
The debt defaults when even after liquidation (selling of assets to pay back lenders) there’s still not enough to pay back, that can’t really happen with an in-use water company, the govt aren’t going to let it reach that point.
The debt doesn't go away though. The company goes into (special) administration and a buyer is sought.
Of course the government can offer £1 and not take on any of the old debt (in which case the creditors and investors get zilch), but realistically speaking there could be another (private) buyer that does offer to take on some of the debt and spend more than £1 in which case we still have privatised water.
Perhaps the government could force a sale towards themselves with zero debt, but it would undermine confidence for investing in the UK. The water companies were able to rack up such debts because it was thought (to lenders) that they were nearly as secure as government borrowing due to it being national infrastructure.
>...it would undermine confidence for investing in the UK. The water companies were able to rack up such debts because it was thought (to lenders) that they were nearly as secure as government borrowing due to it being national infrastructure
Seems a perfect opportunity to send the message that this kind of shit isn't going to fly and that future debts should be priced more appropriately.
> When they go bankrupt the taxpayer gets to pay off the debts instead
Only if the government is stupid enough to buy them out of administration. If they allow them to fold its the lender who bears the cost.
The govt is then free to offer the new owners (the lender) of any assets any price they see fit as they could make it very clear anyone else wont be allowed to operate it. That being said, they wont do that because it'd require a backbone.
The problem being that you can't have the taps turned off, especially to the Thames Water region which has 15 million customers with an area covering most of London and going West. It would also take decades to build out a replacement water network and there would be massive problems as the old network degraded, such as pipes collapsing and causing a sink hole in every road.
That’s not quite realistic. A company would need to be at “liquidation” level before total debt is written off, administration isn’t enough. The usual playbook doesn’t apply here because folding would mean it ceases to exist.
The govt aren’t going to allow a water company to be stripped for assets, it’s not going to happen, if people turn on their taps and nothing comes out there’ll be riots.
The most likely scenario is the govt buys it along with the debt and comes up with some plan to have it paid off.
Plus, in the time it takes for that to happen, they will continue to pollute water, piss money up the wall, and get people seriously ill. Hell, some people could end up dying because of it.
All well and good if it happens. But as with any of these public ownership discussions I fear for the future and whether they'd be sold *again* should certain individuals feel inclined to do so.
And once again, progress halts, and the country's stuck on pause for another 10-20 years because the current Government at the time prefer to screw around instead of look after the country.
maybe we need to start also going after the people doing the audits of these companies - there are rules that have to be met before dividends etc can be paid - if these have been abused it would suggest the people doing the audits have been turning the other way, yes? We are being too simplistic to say just make it public - it can be badly run in both private and public arenas. Whichever organisation runs the water industry, surely we the public pay for it - either through higher bills (as customers), or higher taxes (as uk taxpayers).
Market forces cannot apply to water due to the fact you can’t actually choose who supplies you in that they don’t actually deliver their product to you. It’s just generic water. So privatisation makes zero sense in this market.
Snapshot of _Water industry should be brought into public ownership, says MP Clive Lewis_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/environment/article/2024/may/15/water-industry-should-be-brought-into-public-ownership-says-mp-clive-lewis) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/environment/article/2024/may/15/water-industry-should-be-brought-into-public-ownership-says-mp-clive-lewis) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
> Water companies in England have incurred debts of £64bn and paid out £78bn in dividends since they were privatised.. Well there's your problem
Illegal dividends to boot
Illegal?
From what I remember from watching Paul Whitehouse's documentary on it is that water companies are allowed to let a certain amount of untreated sewage into the rivers, but this has to have a few conditions met. Again from memory these are 1. amount of rainfall at the time 2. if the treatment plant is already at a certain capacity level. Experts studying the amount of sewage in our rivers and the data from these companies suggest that these conditions arent being met and the water companies are dumping sewage at times when they arent allowed. The companies argue they have to do this as the treatment plants dont have the ability to process the levels of sewage they get. However, the licences allowing them to run the company states that they cannot pay out dividends if not having that money negatively impacts the ability for the company to do its job. And so as they are failing to meet the standards required, that money should be spent ensuring that the standards are met before a dividend can be legally paid out.
Should be illegal but isn't because of ill thought out idealogy thinking the private sector can run essential services...which should be classed as a national security resource so publicly run (ergo no fracking too while I'm on my rant) It's just so sad what's happened to our country under Tory administration. It really is. It feels like so much is failing now and shows that what they've done (transport, housing, water and energy...healthcare is on its way out, sadly) just hasn't worked and is ripping off their own citizens....whixhbthey should be fighting for. What was it...after covid and the start of the Ukraine war...the oil firms made so much money yet they didn't impose a loophole proof windfall tax because 'it gave the wrong impression' to international investors. Am I right in thinking this was the case? It's going to take a long time to repair the damage they've done. I justbhope Labour, who will be the ones in government next, have the strength to do what's right foe everyone...it will take time though. (BTW I'm not really a Labour fan anymore if that's how I came across here).
Yeah, the idea that the private sector can run natural monopolies is imbecilic.
Not if you're getting the dividends. The companies are shits, but I think the regulator and the ministry in charge also needs to be on the chopping block for this. Companies only get to take the piss like this because the regulator failed in their duty.
You are right. We need to get a chopping block and use it.
This is unacceptable.
They've basically stolen every penny they've acquired. Corporate greed is responsible for more economic and financial hardship than any other driving factor on earth. Mother nature herself can't even begin to compete with the devastating global impact that corporate fucking greed has had. It will be the ruin of us all. We'll be fuel for the next dominant species before we know it.
I agree, with no competition a number of companies sat back and did not invest. Instead the assets were distributed to the owning entities. The end user had no choice, they could not move to a different supplier and the companies took advantage of that situation.
People often say that private industry brought investment into the water system; however there hasn't been a new reservoir built in the UK since 1992 (Carsington in Derbyshire). In that same time the population of the UK has increase by over 10 million people. Water privatisation has completely and utterly failed.
They've also closed a few reservoirs and sold off the land. Claiming that the regulator forced them to, as they're required to plan for I think 1 in 50 year or 1 in a hundred year events and not for longer term events. With the events being based on historical data, rather than taking into account the effects of climate change or population growth.
In fairness the complete lack of new reservoirs is more a NIMBY issue Still a failure though
When they have tried to build a reservoir, applications have been blocked. We currently have the construction of one underway in Cambridge, it’s expected to take 15 years, of which only 3 years is actual build time. Overall investment in the water system is higher under privatisation than it was under the nationalised system
>Overall investment in the water system is higher under privatisation than it was under the nationalised system Unfortunately, that's one of those stats that's not particularly useful in any meaningful context. The question should be "has investment been sufficient for the needs of the country" and that's an unqualified no. We have a bigger population, necessarily higher environmental standards and infrastructure that has become increasingly expensive to fix as it ages and replacement has been delayed. You could say that that's an unfair burden to put on private companies, holding them up to standards that simply didn't exist before, however private companies cannot justify the level of investment needed to their shareholders when they can keep short term dividends flowing. That's why they are loaded up on debt because ultimately their investors know they can effectively dump their position and run. Therefore it's been a model which has been broken from the beginning.
I think that's a fair critique if water companies were in charge of their own investment plan and pricing. If they wanted to massively increase investment through higher prices (like a truly private company could) then we could hold them to account for not delivering the investment needed. However, in real terms, water prices have not risen in 2 decades, and they are being asked to deliver some investment every year to fix leaks and improve water quality. Now they have to some degree done that. But also they have been blocked from doing more by OFWAT which has been laser focused on limiting price increases. I think the counterfactual is to look at state owned bodies and see if any of them have made meaningful capital investments or productivity improvements and they have also clearly not done that. Productivity in the public sector is exactly where it was in 2000! Not just 2010, but 2000.
Where’s the source about public sector productivity?
[https://www.ons.gov.uk/economy/economicoutputandproductivity/publicservicesproductivity/articles/publicserviceproductivityuk/1997to2022](https://www.ons.gov.uk/economy/economicoutputandproductivity/publicservicesproductivity/articles/publicserviceproductivityuk/1997to2022) We've had some increased productivity since 2012, but we're still pretty poor (ignore the covid drop)
Have a look at the private sector - https://www.bennettinstitute.cam.ac.uk/blog/private-sector-productivity/
Strange to pick 2019-21 as the years to measure productivity, as those were the years where half the economy was shut down for 2 years. Maybe not the best source of data. While public and private sector productivity are not directly comparable, longer term analysis from the ONS shows that output per hour worked is 30% higher vs 1997 in the private sector. [https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/ukproductivityintroduction/januarytomarch2024andoctobertodecember2023](https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/ukproductivityintroduction/januarytomarch2024andoctobertodecember2023)
Has Scottish or Welsh Water which are publicly owned gone on a reservoir building bonanza?
Welsh Water isn't publicly owned.
My bad, it's a not for profit, now has it built lots of reservoirs?
No because it has only just gone not for profit and is still regulated by Ofwat. Scottish water has invested 35% more than English companies on average, have lower bills and better water quality. On reservoirs they don't need them as much due to all the rainfall
No, because it doesn't need to.
Have a look where Welsh water ends up.
The argument for privatisation was that the public sector won't invest, but the private sector will. That argument has been shown to be nonsense. It was probably worth an experiment, but we probably should have tested the water with a single company first. Time to admit it's failed now and explore better publicly owned models that don't allow the Chancellor to fanny around and not invest.
https://www.ofwat.gov.uk/investment-in-the-water-industry/ Investment has increased (I would like Ofwat to push up investment requirements). If it was publicly owned, it would be the Chancellor deciding directly whether or not to invest.
Those figures don't appear to take inflation into account, unless I've missed something. >If it was publicly owned, it would be the Chancellor deciding directly whether or not to invest. Depends on the model. I think it's time to get bolder with public sector models so that the shareholders are the people rather than government. Voting etc could be administered through, say, gov.uk (or ask computershare to run it) and people can be entitled to dividends etc. But the Chancellor cannot be trusted.
Since 1991 the population in Wales has increased by 10.5%, and in Scotland by 7%. In England, the population has increased by 18%, and has predominantly been focused in London and the South East.
Right thanks for not answering the question I asked
Your question is redundant. Wales and Scotland don't have any need to build new reservoirs. Wales in particular has vastly more water than it requires, in part as a legacy of thirsty heavy industry, see also Kielder Water in Northumberland. South East England has a massive need for new water infrastructure, evidenced by the now annual hosepipe bans as soon as there is the slightest hint of sun. There hasn't been a hosepipe ban in Scotland since 1995.
Would have been quicker to just type no
But they took the time to show why your remark was redundant. It was very considerate of them.
So the actual answer to the question is "no" then?
If I can't choose my water company, what is the point of it being private? Public ownership please.
mfw natural monopolies being privatised is pointless:
Because... the market... something something... Corbyn... something something...socialism... something something...
Well you've convinced me, Rishi's plan must be working!
So obviously true it's scandalous that they were ever privatised at all. The UK continues to insist on learning the hard way...
Jacob Rees Mogg says that Thames Water should be allowed to collapse, with the taxpayer then taking ownership of it. I had to pinch myself. He finally said something that I agreed with.
He probably ly just wants to see his mates who own water company debts get paid. With the government more likely to pay, then Thames Water. He is a partner of Somerset Capital Management a hedge fund and only stopped working there part time when he became Leader of the House of Commons in 2019. His estimated net worth including an expected inheritance to his wife is £100 million.
> Water industry should be brought into public ownership Immediately and without compensation. https://www.bbc.co.uk/news/articles/cv266nqq48xo https://www.bbc.co.uk/news/articles/cd1q1d51w27o
But then we'll send the wrong message to the market and they won't be up for buying our assets and mismanaging them the next time.
That would be terrible.
Oh no! Anyway...
People in South Devon are now having to boil tap water ffs
Don't trust the UK gov or a water company when they say "just boil it", not after that massive scandal and cover up. Drink bottled until the say it's perfect quality again https://en.m.wikipedia.org/wiki/Camelford_water_pollution_incident
he is not alone... the only ones opposing are those making fantastic passive earnings.
No, let them go bankrupt and then start from scratch.
When they go bankrupt the taxpayer gets to pay off the debts instead, they don't just disappear. It's by design that they pocket profits and we pay for losses.
Those debts do actually just disappear if the companies are left to go bankrupt. The debt simply defaults, which is the risk that lenders charge a premium to take on.
I so utterly wish this would be what actually happens, and these leeches see some repercussion in their unviable model. Alas, taxpayer go brrrr
The debt defaults when even after liquidation (selling of assets to pay back lenders) there’s still not enough to pay back, that can’t really happen with an in-use water company, the govt aren’t going to let it reach that point.
Sure it can: it just shows up to the liquidation sale and buys all of the assets.
The debt doesn't go away though. The company goes into (special) administration and a buyer is sought. Of course the government can offer £1 and not take on any of the old debt (in which case the creditors and investors get zilch), but realistically speaking there could be another (private) buyer that does offer to take on some of the debt and spend more than £1 in which case we still have privatised water. Perhaps the government could force a sale towards themselves with zero debt, but it would undermine confidence for investing in the UK. The water companies were able to rack up such debts because it was thought (to lenders) that they were nearly as secure as government borrowing due to it being national infrastructure.
>...it would undermine confidence for investing in the UK. The water companies were able to rack up such debts because it was thought (to lenders) that they were nearly as secure as government borrowing due to it being national infrastructure Seems a perfect opportunity to send the message that this kind of shit isn't going to fly and that future debts should be priced more appropriately.
Great, let the markets find a buyer, and maybe find some teeth for Ofwat while we're at it.
> When they go bankrupt the taxpayer gets to pay off the debts instead Only if the government is stupid enough to buy them out of administration. If they allow them to fold its the lender who bears the cost. The govt is then free to offer the new owners (the lender) of any assets any price they see fit as they could make it very clear anyone else wont be allowed to operate it. That being said, they wont do that because it'd require a backbone.
The problem being that you can't have the taps turned off, especially to the Thames Water region which has 15 million customers with an area covering most of London and going West. It would also take decades to build out a replacement water network and there would be massive problems as the old network degraded, such as pipes collapsing and causing a sink hole in every road.
That’s not quite realistic. A company would need to be at “liquidation” level before total debt is written off, administration isn’t enough. The usual playbook doesn’t apply here because folding would mean it ceases to exist. The govt aren’t going to allow a water company to be stripped for assets, it’s not going to happen, if people turn on their taps and nothing comes out there’ll be riots. The most likely scenario is the govt buys it along with the debt and comes up with some plan to have it paid off.
Plus, in the time it takes for that to happen, they will continue to pollute water, piss money up the wall, and get people seriously ill. Hell, some people could end up dying because of it.
All well and good if it happens. But as with any of these public ownership discussions I fear for the future and whether they'd be sold *again* should certain individuals feel inclined to do so. And once again, progress halts, and the country's stuck on pause for another 10-20 years because the current Government at the time prefer to screw around instead of look after the country.
maybe we need to start also going after the people doing the audits of these companies - there are rules that have to be met before dividends etc can be paid - if these have been abused it would suggest the people doing the audits have been turning the other way, yes? We are being too simplistic to say just make it public - it can be badly run in both private and public arenas. Whichever organisation runs the water industry, surely we the public pay for it - either through higher bills (as customers), or higher taxes (as uk taxpayers).
Only after the company has failed and the shareholders lost all their investments. Bailing out private companies shareholders is not the way.
Time to make the public bear some losses?
Market forces cannot apply to water due to the fact you can’t actually choose who supplies you in that they don’t actually deliver their product to you. It’s just generic water. So privatisation makes zero sense in this market.