By Daviemoo
This week has seen the revival of the clip of Thatcher speaking of her intent to privatise utilities, with footage of her at the despatch box in no.10 broadcast to the nation as we’re reading of more investors fleeing the prospect of backing infrastructure devlopment for companies like Thames Water without extortionate price raises for customers. At this point, with a sackful of evidence on why privatisation is nonsense a simple internet search away, we have to ask- will anyone be brave enough to do what’s needed and take our utilities back from the criminal cabals profiteering from them?
I did some maths the other day, to see just how obscene the price raises being proposed by Thames Water & blocked by the water regulator, OfWat, actually are.
According to estimates, the standard water bill for Thames Water customers sits at an already exorbitant £456.
A forty percent price hike would mean an extra £182.40, bringing standard bills to a frankly mind blowing £638.40- higher than my rent when I lived in a studio flat in North East Leeds (that was £550).
As aggravating as this is, it’s not even the disgusting price hike that’s the root issue- remember how I’ve often spoken of symptoms of the disease when we talk politics? This is another symptom, malign as it is. The disease starts with privatisation.
Thatcher declared that selling off our public utilities would allow for the potential- key word there- of much greater investment, by providing competition for things like infrastructure projects and seemingly believed that people paying money to private entities who depended upon our money for survival would create a necessity to keep utilities in good nick, as it were, lest we… what? Adept as I might be at decoding the start of Thatcherite stupidity, I’m immediately lost. Go to a competitor? For water? How would that even work? Naturally I’m not asking for answers from Thatcher or the evidently ever expanding group who believe in her religion-cum-policy like Starmer, Reeves and Lammy.
Privatisation was seen as a way to increase investment and ensure that utilities would be taken care of by companies whose lifeblood runs alongside our water in the same creaking pipes, as they would have to keep up to works and modernisation, lest they haemorrhage support and lose contracts, or some other such illusory twaddle that’s never happened.
Instead, here we are forty years later with water infrastructure that’s kept operating by companies who seem staunchly prepared to refuse to invest at every turn, whilst investors threaten to defund them unless they circumvent the edict of OfWat to crushingly raise prices of customers who have no choice but to depend on them.
This very week a libertarian from one of the think tanks derailing sense from British policy came at Grace Blakeley, whose new book talks about how capitalism actively strangles innovation to create monopolistic control of our privatised utilities, manufacturing consent at every turn. Said libertarian quite literally made Blakeley’s point for her, but as with most who define themselves libertarian, missed it entirely. But we don’t need a (no doubt brilliant but still) book from Blakeley or anyone else to make the case that capitalism is anti innovative- our utilities are a monolithic dossier of proof to this fact.
Private utilities are utterly at the whim of the companies who administrate them- in July 2022, Thames Water spent considerable time creating a lengthy document to send to their customers letting them know that whilst there had been hardship, they were doing the work!
However, anyone who actually took the time to read the document would see that it was a transparent attempt by Thames Water executives to slip on the Emperor’s Clothes to hide the naked neglect of the water utility they were in charge of. CEOs spoke of their excitement to “get the basics right” at the start of the second year of their project to begin works to increase investment in the water infrastructure of the region, whilst on another page another senior staff member declared that they were “doing well” but needed “ongoing investment” to meet their goals.
Now, anyone who understands, even passingly, the level of issue the UK has with its water infrastructure would know all of this to be an attempt to humanise CEOs whose guidance of the company was… shall we say, lacking, and this truly came to bear in September 2023.
In this month, OfWat released a document declaring that water companies, and specifically the top nine in the UK, were holding back on spending a collective £1.7 billion of investment capital- Thames Water were rumoured to be holding on to £373 million, whilst others like Yorkshire Water were said to be holding back even more- £493 million. This unspent capital, when looking at the level of investment needed to stabilise water supply and undertake vital works, is actually quite small- for example, Thames Water are eager to modernise two water treatment plans in the periphery of London to increase and stabilise supply, and that project alone is said to be expected to cost £400 million. And yet- this is unspent capital we’re discussing, rumoured to be sat in the vaults of these companies and doing no good whilst there: but why?
With 2025 fast approaching, a time which brings a new investment cycle for these companies, we should be concerned on multiple levels, but where to even begin dear reader?
Firstly, let us focus on the bill increase.
The simplistic would believe that this precipitous raise in bill prices would be to pay for the works to better the infrastructure- after all, if the average bills of 8.3 million people go up by £182.40 a month, this means new revenue of £1,513,920,000- one billion, five hundred and thirteen million, nine hundred and twenty thousand pounds. But no- the companies are seeking investment capital- aka investors to pay them the money now, with a promise to repay them using the proceeds from the bill hike. Ludicrous that the prices have to go up to pay for money they need- and if the rationale is that the work is so vital it must be done now, not following the collection of this higher bill money… why wasn’t it already done?
This is the true evil of privatisation laid bare- the gallingly expensive work hasn’t happened, not because the UK has suffered a cataclysm and needs to be modernised, but simply, modernisation has fallen by the wayside because CEOs, shareholders and more have utterly scraped bare the coffers of the companies we’re forced to rely on and investment projects have simply not been addressed.
How many shareholder dividends paid out into the pockets of the rich using money that should have been spent on new pipes, expansion projects or repairs during the last forty years? How many CEOs appointed at -according to their own information- £2.3 million a year salary -not mentioning huge bonuses?
Of course, £400 million on modernising water infrastructure is an enormous figure next to what could then comparatively seem the small sum of. £2.3 million a year- but Thames Water, according to standard figures doesn’t employ millions of people- it employs around 5,500 people and the standard average salaries are said to range from between £23,500 to £76,000 for jobs from administrative staff to testing and project specialists.
Their revenue is said to be £2.6 billion and the rise in bills would add another potential billion to that revenue, meaning the company does do well in terms of bottom line- even if every standard staff member was paid the top “normative” salary of £76,000, that would equal £418,000,000 -four hundred and eighteen million- so just over the level of investment needed to bring these water plants up to scratch apparently.
Naturally a lot of capital will be invested into repair works or standard expansion and more- but just how much money that customers pay in bills actually goes to works needed to ensure supply keeps meeting demand, that flood risks are negated and more? Let’s not forget that in the UK right now we have what I readily feel able to call a crisis, where our waters are utterly filthy- my home city of Leeds has some of the most turgid, dirty waters in the country with the river running through the city consistently one of the dirtiest in the nation.
When it comes to investor payout etc, one understands why those with an interest in being, rather than eating, the rich would balk at the idea that perhaps this money they’re paid back for paying into the company counts to us as ill gotten gains- but look at the status quo that is the UK’s current utilities. Can we really justify paying out shareholders for utilities that are not fit for purpose and woefully outdated?
It’s said that Thames Water still operates in large part on Victorian plumbing- plumbing well over 100 years old. The scale of investment would not be so dizzying had this investment been taking place at pace throughout the reign of the privatised companies. And yet- it did not, and now we sit with customers told they must bear the brunt of bill raises, the proceeds of which wont even pay for the works– but will reward the already wealthy for fronting up the cash that’s so urgent it was never asked for from customers and apparently languishes, untouched, in the accounts of these privatised companies.
Thatcher reviled state intervention in what she saw as failing industries- one has to wonder whether the “Iron Lady” would refuse to invest in the companies she foisted on us, seeing the state of their dereliction of duty? No doubt she would waiver if it meant the rich could benefit from public money again- and one has to wonder if this volte face is upcoming under the next government- after all, the tories have left their remit of Thatcher enthusiasm to Starmer under their radicalism.
Labour have been earnestly pushing the need for supply side reform for a long time- and if you wonder what that is, it’s a sanitised way of saying taking money away from public expenditure to prop up the companies who have failed to do their job all along. Need a new playground or your roads fixing? Sorry, we austeritied that money away to pay it to Thames Water so they can do all that work they failed to do in the last almost HALF A CENTURY. It seems that the tories refuse to do anything about this further budding crisis because they know their time is short, and Labour’s policy on it seems to be to throw money into the never sated maw of privatised companies- again. Isn’t the definition of madness doing things over and over again and expecting different results?
I’d say maybe it’s time to call the mental health services on both sides of the front bench- unfortunately, mental health investment is at an all time low as a tory minister tells us that “mental health culture” has gone too far!
How do we fix it
Bravery.
We need a brave government who sets a quota for these companies to improve services by investing existing capital and showing an open ledger on where spend goes, and if these companies don’t take on these projects transparently, and reach strict goals set by the government within x amount of time, the government spends that time preparing to take on the workload of these companies who default to the government, and bring these utilities back into supply- capitalists cannot decry unfairness because they were given a deadline and a chance to upscale on supply to continue the contract and this ongoing oversight provides the rationale people as foolish as Thatcher thought would exist by necessity, to push these companies to meet the supposed high standards that come with capitalist entities running vital utility.
The irony would be- of course the companies would meet those deadlines! They wouldn’t want to let go of the money, and so suddenly, much like the tories stumbling across the well hidden money tree the second a friend needs a contract to be paid for, the long awaited improvements would come to bear- proving that these companies can do the work when properly motivated… and if they failed, common ownership would dictate fairer control of the companies all over again.
But we don’t have a brave government, or a brave incumbent. The sinuous shift of labour policy has seen a paucity of policy to do with common ownership or even stricter regulation on utilities, and many will caution us to wait for the manifesto. One can hope that Labour take the yawning lead they’ve taken over the tories and turn it into policy that truly benefits us- but it seems that labour’s move into the vacated space of 2010 Tory policy will prevent them from touching that sort of policy that truly addresses the root of the issue, and so we’re left with the hope that lobbying can bring. I hope we’re all settled in for a long fight to make sure that the sorely needed policy requirements that would redress the issues with our utilities are actually fixed.
The time for being bullied by end stage capitalist entities is over- if they cannot match the need our utilities demand, then they must go… and that starts with manifestos, talk, promise and action from a government unafraid to wrench our utilities back into our hands from those who have clutched the coin purses for too long.
In terms of wider aspiration for utilities, one has to steady the ship first, don’t we? We need to find a way to have supply meet demand, however that may be. Longer term plans hinge on exactly how we want to administrate utilities in the future- though conservative voters rarely pull for public ownership, even the shifted base that labour have attracted during their pre-election appeal to the proletariat has bolstered general support for common ownership. Starmer has repeatedly claimed that public ownership is out of the bounds in terms of expense- which is why we need to cleverly legislate around these demands, stating that if these utility companies do not meet expectation of infrastructure modernisation, they can be disentangled through defaulting, as a dereliction of the duty they were charged with when they fattened the Thatcher government’s coffers by buying them in the first place.
Additionally the UK need to reckon at last with their decision to Brexit: though it’s clear no fundamental decisions will be made under Starmer about re-entry to the EU especially as the EU has categorically stated there will be no fundamental deal renegotiation until the allotted deadline, our politicians are going to have to get tough on Brussels too- pushing for parity on import export to allow chemical refinement to recommence at previous levels to stop our waters being polluted en masse- and hopefully bringing us back into alignment with long standing clean waters regulation we left behind as we left the EU. However this takes place, be it realignment with the single market and customs union or base level reassessment of our own laws around water purity etc, it is vital that we lead on this thinking of the common good of the UK citizenry and the country.
In areas of contention like this, the key phrase is that, in compromise, usually nobody walks away happy, but everyone walks away satisfied: the UK must find a way to make harmony with the EU by making concessions if those concessions mean an alleviation to pollution and the scourge of monopolism.
But ultimately, this starts and ends with us, the proletariat- for too long, from before my birth to this very day, we have been swallowed by a seething mass of fellows all too eager to accept poor conditions of everything from food on shelves to bill prices to our own vital utilities. No more can we continue to be the “austerity is necessary” fools of the 2010 era when the case for whether the Tory measures succeeded or failed was adjourned because the judge drank from the taps and got legionnaires’. No matter who takes governance this year, the time has long since passed for us to begin to demand, not a stop to chaos and dereliction, but more, and better. The bravery of a government to stand up for its people starts with the people standing up for themselves. If we want better, we have to ask for it, demand it, push for it- not capitulate to the “realism” of a repeat of austerity to reinflate, not bankers this time, but companies who have failed at every level to meet the basic promise of capitalism- to meet base demand with quality supply.
Politically Enraged 