Thames Water

[Spartacus]

There are moves to place Thames Water into a SAR (Special Administration Regime) effectively renationalising it and wiping out its debt. 

But then what ? 

There is also rumours of lookmg for a new owner, including a Chinese backed group that already owns Northumbrian water and UK power. 

Is that a controversial move as it places another of our inferstructural assets in foreign hands? 

Should it be renationalised and run as a not for profit government organisation, placing investment and improvements before  shareholders?

This in itself would adversely impact pension funds who have invested in utilities. 

Its fairly obvious that Thames Water needs rescuing or restructure but what is the optimum and correct path to take ? 

 

[Earl Aelfheah]

14 minutes ago, Spartacus said:

Should it be renationalised and run as a not for profit government organisation, placing investment and improvements before  shareholders?

Yes.

[Spartacus]

Great answer, but how do you then square it up with pension pots investments without adversely impacting future growth. 

Buit of a tricky one as on one hand it should be nationalised but on the other we don't want to see future pension poverty relying on government top ups. 

Far too complicated for a simple answer 

 

[Sue]

58 minutes ago, Spartacus said:

Great answer, but how do you then square it up with pension pots investments without adversely impacting future growth. 

Buit of a tricky one as on one hand it should be nationalised but on the other we don't want to see future pension poverty relying on government top ups. 

Far too complicated for a simple answer 

 

So what would be your preference then, Spartacus, and why?

[Spartacus]

Thats the problem, I dont have a solution, but I can see disadvantages of some of the proposed solutions. 

Not selling it to a foreign company is my preference but after that I have no idea of the best path / solution with the least impact for all.

Whats your view Sue ? 

[Jenijenjen]

4 hours ago, Spartacus said:

 

This in itself would adversely impact pension funds who have invested in utilities. 

I would hope that those managing pension funds that have invested in TW have already seen the writing on the wall and are investing elsewhere.

[Earl Aelfheah]

Agree with Jenijenjen.

Ultimately, water is an essential resource and a natural monopoly. It should be publicly owned imo. 

[just_browsing]

28 minutes ago, Earl Aelfheah said:

Agree with Jenijenjen.

Ultimately, water is an essential resource and a natural monopoly. It should be publicly owned imo. 

There is a reason why I think only England and Chile (no idea why) have a fully privatised national water set-up, and why the UN recognises the right to water as a human right - "the right to water entitles everyone to have access to sufficient, safe, acceptable, physically accessible, and affordable water for personal and domestic use".

 

Whoever is running pension funds should be shifting sharply, if they haven't done so already (and I'm sure they haven't for the most part).

[Sue]

7 hours ago, Spartacus said:

Thats the problem, I dont have a solution, but I can see disadvantages of some of the proposed solutions. 

Not selling it to a foreign company is my preference but after that I have no idea of the best path / solution with the least impact for all.

Whats your view Sue ? 

I think it should be brought back into public ownership.

However, I admit that that is not based on any facts at all, just on my dislike of shareholders making money from a business which doesn't appear to be doing what it's supposed to do.

[Happyme5]

It would cost so much  now.  But pay off for us in the long run. Thatcher and her privatisation of public services.  It is a total disaster 

[Sue]

9 hours ago, Happyme5 said:

It would cost so much  now.  But pay off for us in the long run. Thatcher and her privatisation of public services.  It is a total disaster 

At least the situation with rail travel  is being addressed.

[Burbage]

22 hours ago, Spartacus said:

Its fairly obvious that Thames Water needs rescuing or restructure but what is the optimum and correct path to take ? 

The fundamental problem at present is that the government has been given to belief that if they took it into public ownership, they'd have to pay all its billions of debts. This, oddly, is not a problem that's dogged any of its previous owners, and a very simple solution would be to fine it, say, £40bn for being useless and then pick it up for free.

So that's possible. However one of the compelling arguments that got it privatised in the first place was that government-run operations aren't often very well run. They might promise 40 new reservoirs to get them through an election, but that's the last you'll hear of it till the water-rates bill arrives, and there's precious little in the way of economic "growth" to be had out of processing sewage. There are advantages, perhaps, to having an accountable hand on the tiller, but governments, and their agencies, tend not to very accountable. Last December, for example, the Office for Environmental Protection released a report detailing how DEFRA, the Environment Agency and Ofwat had all failed in their legal duties, but as the OEP's powers extend only to writing reports, that's as far as it went.

An alternative might be to have it run as an autonomous business, with the government holding the only share. But that's what they did with the Post Office where any benefits of privatisation have become only a boondoggle for lawyers. Not that lawyers don't deserve the compulsory generosity of taxpayers, but their needs must surely be secondary to the Post Office's vital core missions of re-selling stamps, not handing out pensions and cooking the digital books.

Which leaves us, I think, in need of a Third Way. That might seem a little too Blairite for some, but I think there's a way to add a Corbynish gloss by setting it up as a co-operative, owned not by the state but by its customers, who would have an interest in striking a balance between increasing bills, maintaining supplies and preserving their own environment, and who'd be able to hold the management to account without having to go through a web of five regulators by way of the office of a part-time representative with an eye on a job in the Cabinet. There are risks with that, of course, in that the shoutiest can exert the most influence, and the shoutiest are not often the most wise, but with everyone having an equal stake, the shoutiest usually get shouted down, which is why co-operatives tend to last longer than businesses steered by cliques of shareholders or political advisers.

In other words, the optimum and correct path to take is tried and tested and sitting right there and I'll eat my hat if it happens.





 

[Sue]

24 minutes ago, Burbage said:

The fundamental problem at present is that the government has been given to belief that if they took it into public ownership, they'd have to pay all its billions of debts. This, oddly, is not a problem that's dogged any of its previous owners, and a very simple solution would be to fine it, say, £40bn for being useless and then pick it up for free.

So that's possible. However one of the compelling arguments that got it privatised in the first place was that government-run operations aren't often very well run. They might promise 40 new reservoirs to get them through an election, but that's the last you'll hear of it till the water-rates bill arrives, and there's precious little in the way of economic "growth" to be had out of processing sewage. There are advantages, perhaps, to having an accountable hand on the tiller, but governments, and their agencies, tend not to very accountable. Last December, for example, the Office for Environmental Protection released a report detailing how DEFRA, the Environment Agency and Ofwat had all failed in their legal duties, but as the OEP's powers extend only to writing reports, that's as far as it went.

An alternative might be to have it run as an autonomous business, with the government holding the only share. But that's what they did with the Post Office where any benefits of privatisation have become only a boondoggle for lawyers. Not that lawyers don't deserve the compulsory generosity of taxpayers, but their needs must surely be secondary to the Post Office's vital core missions of re-selling stamps, not handing out pensions and cooking the digital books.

Which leaves us, I think, in need of a Third Way. That might seem a little too Blairite for some, but I think there's a way to add a Corbynish gloss by setting it up as a co-operative, owned not by the state but by its customers, who would have an interest in striking a balance between increasing bills, maintaining supplies and preserving their own environment, and who'd be able to hold the management to account without having to go through a web of five regulators by way of the office of a part-time representative with an eye on a job in the Cabinet. There are risks with that, of course, in that the shoutiest can exert the most influence, and the shoutiest are not often the most wise, but with everyone having an equal stake, the shoutiest usually get shouted down, which is why co-operatives tend to last longer than businesses steered by cliques of shareholders or political advisers.

In other words, the optimum and correct path to take is tried and tested and sitting right there and I'll eat my hat if it happens.





 

That's a really interesting possibility!

[Burbage]

21 hours ago, Spartacus said:

Great answer, but how do you then square it up with pension pots investments without adversely impacting future growth. 

Buit of a tricky one as on one hand it should be nationalised but on the other we don't want to see future pension poverty relying on government top ups. 

Far too complicated for a simple answer 

 

I think this is a bit of a myth.  It's true that some of the current owners are pension funds (chiefly the Ontario Universities') but they're global outfits, big enough to know what they're about. As for ordinary UK pension funds, they mostly invest in publicly-tradeable stocks, which Thames no longer is (it's a private limited company, not a PLC), so even those that lazily track the markets by buying everything in the index won't be exposed as Thames isn't in any index.

In other words, it's a lot less complicated than Thames, the Government or innumerable consultancies and PR outfits would like you to believe.

In case, incidentally, the idea of a cooperative offends any delicate Thatcherite sensibilities, I'd argue that it fits the Thatcherite vision of a stakeholding democracy much better than selling tradeable shares to the public very cheaply. The public, despite their blessable cottons, are too easily tempted by the small but easy win (which is how they sold off their own building societies, preparing the ground for the credit crunch and then the crash) and, as became obvious after every privatisation before or since, their modest stakes inevitably end up in the hands of financial engineers whose only priority is to siphon off the assets and leave the husk to either go bankrupt or get "rescued" by the taxpayers (who thus get to pay twice for nothing). The root of that is the concept of "limited liability" which makes it all possible, but even the most nauseating free-market optimist would struggle to predict the demise of that.






 

[malumbu]

Let them go bust.  Enact emergency legislation to ensure that the water still flows and the rest of the network operates.

Why should we care what happens to the investors.  Have no idea could or would this work, and where next.

And the workers will still be needed whoever runs the show.