Let’s end the legalised larceny of water privatisation
‘Privatisation has been a failure because it rested on myths about competition and market discipline’ The company inherited the infrastructure on the cheap and failed to invest in it, while hiking prices and paying out bumper dividends. Thirty-five years on from Margaret Thatcher’s sell-off, it is time our politicians started learning the lessons or paying the electoral price.
The problem for Thames is that these cash bonanzas – which I would argue are made from milking its customers like cash cows and selling off assets – have not been properly invested or put in reserves against a rainy day but distributed to shareholders in dividends. Where has the money gone? The answer is into the pocket of shareholders. Those profits are from your bills.
Reed advocates tougher regulation and bigger fines – which may have been the right course of action a decade or three ago – but that will only accelerate more water companies collapsing, which then begs the question what to do then?. They suggest the primary benefit of public ownership would be to stop the extraction of dividends to shareholders and to reduce interest payments on debt. These combined savings would be equivalent to a cut in water bills of about 25 per cent.
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