[News] Well done southern water

[Green Cross Code Man]

I'm just waiting for the inevitable hosepipe ban in June after the wettest couple of years in history.

 

[rippleman]

Caroline Lucas, at todays PMQs, stated that since privatisation the water companies have

1) Racked up £64bn in debts and

2) Paid out £78bn to shareholders

Anybody still need convincing that our water and sewerage should be in public hands rather than in the grubby mitts of profiteers?

 

[Green Cross Code Man]

Caroline Lucas, at todays PMQs, stated that since privatisation the water companies have

1) Racked up £64bn in debts and

2) Paid out £78bn to shareholders

Anybody still need convincing that our water and sewerage should be in public hands rather than in the grubby mitts of profiteers?

And yet if one is for nationalisation, one is a socialist.

 

[Weststander]

Water and the entire railway industry/land should be state owned.

Not necessarily for reasons of political dogma. Water because despite unerring above inflation increases in charges, they’ve failed - water loss through leaks and the disgraceful pollution of our waterways and sea. The railways - it’s largely failed. Rolling stock is light years ahead of the last BR crap, but the multitude of companies and fares is a complete nonsense, it doesn’t serve to lift standards, lower fares or anything else.

 

[Neil]

Water and the entire railway industry/land should be state owned.

Not necessarily for reasons of political dogma. Water because despite unerring above inflation increases in charges, they’ve failed - water loss through leaks and the disgraceful pollution of our waterways and sea. The railways - it’s largely failed. Rolling stock is light years ahead of the last BR crap, but the multitude of companies and fares is a complete nonsense, it doesn’t serve to lift standards, lower fares or anything else.

And being an ex Postie you forgot about that debarcle as well

 

[Questions]

And yet if one is for nationalisation, one is a socialist.

Nothing wrong with Socialism… Dishonesty, that’s where we go a hunting

 

[Mustafa II]

Water and the entire railway industry/land should be state owned.

Not necessarily for reasons of political dogma. Water because despite unerring above inflation increases in charges, they’ve failed - water loss through leaks and the disgraceful pollution of our waterways and sea. The railways - it’s largely failed. Rolling stock is light years ahead of the last BR crap, but the multitude of companies and fares is a complete nonsense, it doesn’t serve to lift standards, lower fares or anything else.

H

 

[Green Cross Code Man]

Nothing wrong with Socialism… Dishonesty, that’s where we go a hunting

I agree. And I don't dislike socialism as an ideal. It's certainly kinder in it's values.

 

[Weststander]

And being an ex Postie you forgot about that debarcle as well

A daft privatisation. The original Royal Mail worked well, didn’t it? The only minor controversies were stopping two deliveries a day and when stamps occasionally went up by 2p to for example 24p . Proverbial storms in teacups.

 

[Guy Fawkes]

Caroline Lucas, at todays PMQs, stated that since privatisation the water companies have

1) Racked up £64bn in debts and

2) Paid out £78bn to shareholders

Anybody still need convincing that our water and sewerage should be in public hands rather than in the grubby mitts of profiteers?

For balance, are there figures on what the water companies have invested in the infrastructure during that time?

And figures that would have been forecasts for what the state would have invested during the time of private ownership if it had remained in public hands? ie. - Would the state have been able to match or exceed that investment figure and delivered what was needed? (given one of the reasons claimed it was necessary to privatise was because the state couldn't afford the levels of investment required. (poor drinking water quality was a big issue when it left state ownership, and it was still spilling significant amounts of sewage straight into the sea)

I ask as we have seen other state owned services facing budget cuts, etc.. over the years, and the expectation from the public has always seemed to be that the state should subsidise the cost of the service delivered to the public, by running at a loss, with the tax payer / increased public borrowing picking up the difference (what would have happened during the credit crunch and austerity for example?)

A lot of the debt that these companies have run up is by borrowing money from private equity firms, etc to be able to pay for and deliver the capital needed to invest in the network. They couldn't borrow that capital without offering an incentive to the lender in the terms of interest / dividentds on their investment

When the state borrows, it is added to the national debt, and there are interest charges on this too (*why the UK's credit rating matters, and the more that gets downgraded, the more it costs to borrow the money needed for investments) and currently a percentage of tax collected each year goes directly to paying this. So basically, the more that the state borrows, and increases its debt, the more it has to service, and the harder it will become to be able to invest in the future as that debt will still be growing year on year, potentially taking more and more of the tax collected by Governments to service it. (something that those who want state ownership do not think about and continue spending and running up debt)

(*There are three main credit agencies: S&P, Moody’s and Fitch. Moody’s and Fitch had already downgraded the UK, from Aaa and AAA to Aa1 and AA+ respectively, in 2013 when the government announced further austerity measures. Triple-A is the highest rating that can be given, and triple-D is the lowest.)

 

[beorhthelm]

For balance, are there figures on what the water companies have invested in the infrastructure during that time?

i'm sure the MP mentioned it, £190bn has been invested. they may not have mentioned a lot of the dividends are to bond holders, due to the somewhat dodgy corporate set up, numbers report on the regulated operating company and not the parent companies.

 

[CheeseRolls]

For balance, are there figures on what the water companies have invested in the infrastructure during that time?

And figures that would have been forecasts for what the state would have invested during the time of private ownership if it had remained in public hands? ie. - Would the state have been able to match or exceed that investment figure and delivered what was needed? (given one of the reasons claimed it was necessary to privatise was because the state couldn't afford the levels of investment required. (poor drinking water quality was a big issue when it left state ownership, and it was still spilling significant amounts of sewage straight into the sea)

I ask as we have seen other state owned services facing budget cuts, etc.. over the years, and the expectation from the public has always seemed to be that the state should subsidise the cost of the service delivered to the public, by running at a loss, with the tax payer / increased public borrowing picking up the difference (what would have happened during the credit crunch and austerity for example?)

A lot of the debt that these companies have run up is by borrowing money from private equity firms, etc to be able to pay for and deliver the capital needed to invest in the network. They couldn't borrow that capital without offering an incentive to the lender in the terms of interest / dividentds on their investment

When the state borrows, it is added to the national debt, and there are interest charges on this too (*why the UK's credit rating matters, and the more that gets downgraded, the more it costs to borrow the money needed for investments) and currently a percentage of tax collected each year goes directly to paying this. So basically, the more that the state borrows, and increases its debt, the more it has to service, and the harder it will become to be able to invest in the future as that debt will still be growing year on year, potentially taking more and more of the tax collected by Governments to service it. (something that those who want state ownership do not think about and continue spending and running up debt)

(*There are three main credit agencies: S&P, Moody’s and Fitch. Moody’s and Fitch had already downgraded the UK, from Aaa and AAA to Aa1 and AA+ respectively, in 2013 when the government announced further austerity measures. Triple-A is the highest rating that can be given, and triple-D is the lowest.)

If you are interested in balance feel free to go find your own figures and add them to the debate. I look forward to reading them.

Here are a couple of articles on the credit ratings of Southern Water and Thame Water. You will see that these are far lower than the government ratings. This in simplistic terms means it is much more expensive for them to borrow money than it is for the government to borrow money.

https://www.fitchratings.com/resear...-to-bbb-maintains-negative-outlook-07-07-2023
https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3148241

Whether we are talking about renewing pipes, improving sewage treatment, or creating new reservoirs, these infrastructure assets are both necessary and single purpose. There is virtually no opportunities to create additional revenue from these assets. How this is funded whether via increased bills or borrowing, the net result is that we the consumers pay. The question is whether we should be liable for the debt that has been loaded into these companies, which did not exist at the time of privatisation.