Mick Harper
Site Admin

In: London
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Oh no, he's not back on water companies, is he?
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It’s not water under this bridge July 31, 2024
Do you want to drink from the free enterprise tap?
I got into a mild argy-bargy with a fellow Medium contributor over our joint water-supplier, Thames Water. They’re on the verge of going bankrupt and we’ll have to drink Evian.
All the other water companies are hanging on but only by dumping more and more sewage into our rivers rather than building more and more treatment plants. My Medium man (and everyone else) seems to think the water companies are the villains.
They are, but only kinda. |
In the old days we got our water from our local publicly-owned utility, ‘the water board’. It provided us with cheap if not very tasty water, it took away our bodily effluxions without fuss, and we didn’t even have to pay for it. Well, we did but only as an unnoticed line on our general rates bill for dustbinmen, librarians et al. Everything was sweetness and light except oftentimes
our rivers were middlingly polluted. |
None of the water boards had enough money to do anything much about it and the government only stepped in if things got so bad it caused a stink. Especially if it was the Thames where the politicians are only yards away and have very long noses.
We denizens of the Thames Valley didn’t have to pay a sou for the clean-up. |
We now motor on to the 1980’s and Britain is in the throes of Thatcherite privatisation mania. Whither water? It’s a natural monopoly, everyone has to have it, it’s an old technology, it can only be monetised with great difficulty and there’s a limited upside for opportunity profit.
Not what anyone would call promising territory for free market principles. |
But, even so, there is no reason not to put the water industry in private hands. Leftists are completely daft when it comes to who is better suited to providing a service to customers in exchange for money. Is it civil servants or is it hard-nosed capitalists? I’ll give them a clue, it isn’t civil servants.
* Increased demand meant water ceased to be a matter of distribution but a question of conservation
* Global warming and new weather patterns meant too much water and/or too little water any time of the year but most years
* The amenity industry took off — rivers were being used by everyone from kingfisher fanciers to rough swimmers so they had to be clean
* Agriculture was increasing the use of fertilisers which inevitably reached the rivers in greater quantities
* Intensive animal rearing was dumping swill in the rivers (especially organic and free range animals who couldn’t be kept in proper purpose-built factory units)
None of these were problems any PLC could not handle in its sleep. |
You just increase the price of your product and do the needful. Except for one thing: the customers were no longer paying for water in their sleep. They weren’t facing increased rates and having hard words with the local council, now it was having to pay a relatively whopping bill from Thames Water or United Utilities or whoever.
And it wasn’t clear who you swore at. |
The water companies for being grasping capitalists?
The regulator, Ofwat, for allowing them to be grasping capitalists?
The government for allowing the regulator to allow it?
Ourselves for being bellyaching cheapskates?
The one thing the Great British Public is known for is its sense of fair play. |
There was no question, it was the water companies. They weren’t even British for goodness sakes. They were pension funds in Ontario, Dubai and China who had bought into the industry on the basis that providing water and taking away sewage were nice, dependable little earners that could be left in the hands of professional managers, who had been running it in their sleep since the nineteenth century.
Except now they couldn’t, it had all become political. |
If no-one was prepared to pay the bucks to bring the water industry kicking and screaming into the 21st century, who was going to?
* the public kicked and screamed at the government
* the government had a quiet word with the regulator
* the regulator leant quietly on the managers of the water companies
* the managers quietly dumped more and more sewage into the rivers
* the owners quietly started dumping their investment.
But naturally they extracted as much money as they could |
while they still could, by way of bonuses and dividends. Rather than build all the new infrastructure which wasn’t going to benefit them any, they would be long gone. The regulator and the politicians were completely out of their depths and let it happen. (He was from the atomic energy industry, they were from central miscasting.)
However, no great harm will be done |
because, when it is time to take the water companies ‘back into public ownership’, they won’t be worth what the pension funds paid (but they will still be showing a profit of sorts). Then it will be the job of the British government to spend billions and billions renewing the leaking pipes, upgrading the sewage works and what have you.
I don’t know whether they will. |
I don’t even know whether they should, I’m a big fan of less than pristine rivers, hosepipe bans and low water charges. But we’ll muddle along somehow.
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