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Friday, 19 July 2013 00:00

Nailing a big fat lie

When even Sir Ian Byatt, former top dog at toothless regulator Ofwat, smells a rat in the water industry you know something's amiss.

He complains that the firms that squeeze us dry are extracting too many millions for shareholders at the expense of the rest of us.

At the centre of his complaints are the private equity firms. These raise cash from investors, buy up companies with the proceeds, then burden their new toy with debt to pay back the bonds, creaming off a healthy profit for themselves in the process.

This, for example, forced down Thames Water's credit rating which in turn has passed the burden of raising cash for infrastructure firmly back in the hands of taxpayers.

For years, Sir Ian complains, people have been paying too much for their water and firms have been making too much money as a result.

His sirness, of course, is a supporter of privatisation. It's just that this is "unfair" privatisation which risks destabilising the sector.

What poppycock.

This paper warned in the first place that flogging the family silver for a quick buck in the name of "shareholder democracy" was a big fat lie.

The current situation's even more sickening given that a big part of the declared rationale for doing so was that it would force down costs. Now, billions of profits and rising water bills later, these people can't find the decency to change the tune.

In reality the Thatcherite fans of privatisation, as enshrined in the EU services directive, were eying up water and the other utilities not in the interest of cutting costs but in the interests of extracting profit - for themselves.

Reservoirs have been flogged for their property value and hardly a single new one's been built since, well, since exactly when the local water boards were thrown to the wolves.

Once they had the jaws on the carcass they couldn't help taking that little extra.

So rather than the returns from bills going back into our collective pocket we've ended up with a bunch of rogues who are fleecing us royally then coming back for more. And evading tax along the road.

Sir Ian is clearly too brainwashed to see the bleeding obvious. Instead he wants a complex regulatory mechanism overseen by Ofwat that dates back to the 1800s.

Pull the other one. You can generate reams of paper and complex rules, but you can't get the greed out of capitalism. There's a reason energy was brought into municipal ownership in the first place.

Because the hotch-potch of private firms in existence up to that point didn't do the business.

In Wales water is already provided by an arm's length body in the public interest after the bungling privateers who'd run it buckled under debts and gave up the ghost.

But with Labour remaining noticeably quiet on this one, just as it has been of late on ludicrous plans for profitable East Coast mainline's reprivatisation, it's left to GMB to stand up for common sense.

Its members know first hand what a lot of rubbish privatisation has been.

The water industry is teetering on the brink because of the vipers in the private sector, and we're all paying the price.

It's time to throw these water rats back into the sewer and renationalise before we've got an even bigger bill to pay.

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