water companies

Let Thames Water go bust: It’s time to bring water back into public ownership

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https://leftfootforward.org/2024/04/let-thames-water-go-bust-its-time-to-bring-water-back-into-public-ownership/

England’s privatised water companies are an example of vulture capitalism

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.

England’s privatised water companies are an example of vulture capitalism unleashed by neoliberal obsession with privatisation of essential services. Its poster child, Thames Water, the UK’s largest water company, wants a 40% price increase and guaranteed returns. Its investors based in China, Abu Dhabi, Canada and the Netherlands are holding the government, regulators and people to ransom by stating that unless their demands are met they won’t invest and let the business collapse. Any concession to Thames will enable other water companies and corporations to do the same. It is time to tackle vulture capitalism head-on, let Thames go bust and bring water back into public ownership.

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The industry was privatised in 1989 for a net price of £6.1bn, £7.5bn price minus a dowry of £1.5bn to give companies a debt free start. So far water companies have paid more than £75bn in dividends, and neglected investment. Customer bills have increased by over 350%, double the rate of inflation. Companies operate through complex opaque corporate structures and are adept at shifting profits to low/no tax jurisdiction. They pay little or no corporation tax. In 2023, sewage was dumped into rivers/seas for 3.6 million hours, compared to 1.75m hours in 2022. Some 3bn litres of water is lost every year due to leaks from a dilapidated infrastructure. No new reservoirs have been built since 1989.

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Privatisation has failed and water industry needs to be brought back into public ownership. However, acknowledging that privatisation has failed would be a bitter pill to swallow for the Conservative government. In an election year, the government will try to prolong the life of Thames Water. During his leadership campaign, Labour leader Sir Keir Starmer promised to nationalise water, but has since reversed his position. A crisis looms for both parties.

Profiteering is the root cause of the crisis, and that can’t be addressed by handing the company to another profit seeking operator. The profit element needs to be removed and surpluses need to be ploughed back into building the infrastructure. Public ownership whether through a not-for-profit, a community owned, or a mutual organisation is the best way forward.

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https://leftfootforward.org/2024/04/let-thames-water-go-bust-its-time-to-bring-water-back-into-public-ownership/

Image of a burst water main.
Image of a burst water main.

dizzy: 350% seems far more than double the rate of inflation so there may be an error there. I wonder if there is a case of criminal neglect here since water companies’ conduct affects pollution and health.

Continue ReadingLet Thames Water go bust: It’s time to bring water back into public ownership

Morning Star: Sewage at the boat race: it’s well over time we take water back into public hands

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Many articles from the Morning Star featured today. https://morningstaronline.co.uk/article/editorial-take-water-back-public-hands

A rowing boat on the River Thames Putney, London, March 27, 2024

THE crisis of capitalism is running out of your taps and pouring into our rivers. Britain’s water industry is lurching towards calamity, poisoned by the priorities of profit and abetted by politicians in the pocket of the privateers.

The largest water company in the country, Thames Water, appears to be on the edge of insolvency after its investors refused to pump in cash essential to the company’s survival — apparently because the reluctance of regulator Ofwat to authorise even steeper increases in bills to households made it an unattractive bet.

And alarm was spread about the annual Oxford-Cambridge boat race on Saturday having to row through the sewage-ridden Thames, with doubts being cast on maintaining the tradition of throwing the cox of the winning crew in the river on health and safety grounds.

Now there are calls for the government to declare a national emergency as discharges of raw sewage into rivers and seas across Britain reach a record high.

These are the fruits of the handing over of the most basic resource to the tender mercies of monopoly capital. The sewage in the rivers is one side of the coin, the riches sitting in shareholders’ bank accounts is the other.

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Nationalisation may be forced on the government in the case of Thames Water. But state control can only work in a context of planning, investment and a role for both workers’ and consumer interests.

That was Labour Party policy until Keir Starmer abandoned it. It is time the labour movement demanded its reinstatement.

Many articles from the Morning Star featured today. https://morningstaronline.co.uk/article/editorial-take-water-back-public-hands

Continue ReadingMorning Star: Sewage at the boat race: it’s well over time we take water back into public hands

Fresh crisis for Thames Water as investors pull plug on £500m of funding

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https://www.theguardian.com/business/2024/mar/28/fresh-crisis-for-thames-water-as-investors-pull-plug-on-500m-of-funding

In July, Thames Water had agreed £750m of funding, with the first payment expected to be made on 31 March. Photograph: Maureen McLean/Shutterstock

Decision raises concerns about financial future of UK’s biggest water company

Investors at Thames Water have pulled the plug on £500m of emergency funding, raising concerns about the financial future of the country’s largest water company.

The beleaguered utilities firm announced this morning that its shareholders had refused to provide the first tranche of £750m funding set to secure its short-term cashflow, after the company had failed to meet certain conditions.

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The crisis for Thames Water comes after devastating data on the scale of raw sewage discharges into rivers and seas this week.

Thames Water, who admit in their business plan they have been “sweating assets”, oversaw a 163% [increase?] in the duration of sewage dumping into rivers as their creaking infrastructure failed to cope with rainfall levels.

Thames is also at the centre of a major investigation by the water regulator Ofwat into sewage dumping from its treatment works, which could lead to massive financial penalties being imposed on the company.

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Thames Water said on Wednesday that investors believed the conditions of funding had not been met and the £500m of new equity would not be handed over in the coming days.

A statement on behalf of Thames’s shareholders appeared to blame Ofwat: “After more than a year of negotiations with the regulator, Ofwat has not been prepared to provide the necessary regulatory support for a business plan which ultimately addresses the issues that Thames Water faces. As a result, shareholders are not in a position to provide further funding to Thames Water.

“Shareholders will work constructively with Thames Water, Ofwat and government on how to address the consequences of Ofwat’s decision.”

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https://www.theguardian.com/business/2024/mar/28/fresh-crisis-for-thames-water-as-investors-pull-plug-on-500m-of-funding

Continue ReadingFresh crisis for Thames Water as investors pull plug on £500m of funding

Green Party responds to increased sewage discharges by water companies

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Image of the Green Party's Carla Denyer on BBC Question Time.
Image of the Green Party’s Carla Denyer on BBC Question Time.

Reacting to Environment Agency figures showing water companies increasing sewage discharges into rivers, Green Party co-leader Carla Denyer said: 

“Water companies continue to be allowed to dump ever more sewage into our rivers, waterways and coastal waters while splashing funds at shareholder dividends and fat cat salaries for water bosses.  

“The £57bn in payouts from the water industry over the last 30 years should have gone towards improving standards.   

“Greens would end this failed experiment in privatisation, bringing the water companies back into public control so we can clean up this industry.” 

Continue ReadingGreen Party responds to increased sewage discharges by water companies

Revealed: Where up to a quarter of your water bill is really going

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Image of a burst water main.
Image of a burst water main.

https://leftfootforward.org/2023/12/revealed-where-up-to-a-quarter-of-your-water-bill-is-really-going/

It’s been branded ‘daylight robbery’

An investigation by the Guardian published today has revealed that staggering proportions of the public’s water bills are used to service private water firms’ debt. According to the paper’s analysis of financial data over a quarter of some water companies’ revenue goes on servicing debt.

The UK’s largest water firm, Thames Water, uses an astonishing 28 per cent of its revenue to service debt. Southern Water and South East Water both also use more than a quarter of their revenue for the same purpose.

Almost the entirety of water company revenue is made up of customer bills. As of March, the private water firms in England had racked up combined debts of more than £60 billion. Meanwhile, since privatisation of water in England in 1989, private water companies have paid out over £70 billion in dividends to shareholders.

The Guardian notes that Scottish Water, which remains publicly owned, spent just 10 per cent of its revenues financing its debt, less than all of the private water firms in England.

The revelations have led to a furious public backlash and renewed calls for England’s water to be taken back into public ownership.

Labour peer and Left Foot Forward columnist Prem Sikka branded the situation as ‘daylight robbery’, saying that money had been ‘borrowed to pay dividends, and that ‘companies want more from captive customers’.

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https://leftfootforward.org/2023/12/revealed-where-up-to-a-quarter-of-your-water-bill-is-really-going/

dizzy: This ridiculous situation is on the Conservatives watch …

Image of cash and pre-payment meter key
Image of cash and pre-payment meter key
Continue ReadingRevealed: Where up to a quarter of your water bill is really going