We, gulp, find ourselves agreeing with The Guardian here
Obviously, not wholly and entirely agreeing with The Guardian but:
Instead, this column’s long-held view is that, under a privatised system, water companies belong on the stock market. Only three of the 10 that were privatised still have a listing, and nobody pretends they are all models of virtue (United Utilities’ woes at Windermere being the latest example). But, in the round, environmental performance has been better at quoted companies – boardroom accountability is easier to enforce, financial reporting is more transparent and borrowing is lower. Thames went wrong under Macquarie’s private equity leverage lash-up and then was holed under a slow-moving consortium of faraway funds that overpaid for the assets and attempted to manage by committee.
Publicly accountable capitalism seems like a good enough idea to us. This is in contrast to what is being said elsewhere:
Water companies in England could be banned from making a profit under plans for a complete overhaul of the system.
The idea is one of the options being considered by a new commission set up by the Department for Environment, Food and Rural Affairs (Defra) amid public fury over the way firms have prioritised profit over the environment.
Sources at the department said they would consider forcing the sale of water companies in England to firms that would run them as not-for-profits. Unlike under nationalisation, the company would not be run by the government but by a private company, run for public benefit.
Well, we’ve an example of just that, as the article says:
Welsh Water, which runs under this model, has no shareholders and any surplus money is reinvested back into the business or into customer services.
The problem with that model is that, as that second article itself points out, Welsh Water (tho’ they call it Dwr Cymru, possibly just to confuse) has above average costs right now and under the proposed price changes will be the most expensive.
It’s also not obvious - not enough monitoring is done in Wales for us to fully know but the indications even so are not good - that the environmental performance is any better. If we are to believe multiple George Monbiot columns about the Wye Valley, it’s worse.
We, here, are intensely pragmatic. Sure, we supported water privatisation, helped set it up. But if it turns out it doesn’t work and that there’s another model which does work better then we’ll support that instead, no problem. But if the not for profit model does not work better - as Welsh Water seems not to - then why on Earth are people trying to impose that across the industry?
Ah, yes, we forgot. Capitalism bad, see? Doesn’t matter what the actual results are, look you, it’s just Bad, M’Kay? Performative nonsense instead of what works - that’s really not the way to run a country.
Tim Worstall