UK Strategic Planning

[blandy]

43 minutes ago, bickster said:

At some point you have to say but the shareholders keep taking profits when the profits should have been used to stop flushing jobbies down the river

 

Of course. I totally agree. That is in the past and the shareholder gains and dividends have left. They’re not in play any more. For me the questions is what happens, or should happen from this point on.

My priority would be stop the pollution, stop the profiteering, build the necessary pipes, reservoirs, purification plants, sewers and fix the crumbling dams and stuff.

Absolutely none of that is solved by a change of legal ownership. New owners (guvmint) might do a better job, though there’s no guarantee that given the general **** state of everything, water will be a spending priority. So how do you most effectively address the problems in the short to medium term? You basically force the companies to do what they should do anyway, and as discussed above.

Yes privatisation was wrong, but we are where we are.

[chrisp65]

1 hour ago, blandy said:

Except it doesn't all go out of the window. If the keys are handed back the shareholders and pension funds and logistics get **** over. 

If "the keys are handed back" then that's because the shareholders (and therefore the actual owners) either own shares which have already plummeted in value, because the Company is bust, or they have authorised the board to hand the keys back, via an EGM and vote and they voluntarily take the loss of their shares. If the company is bust, and unable to get the shareholders to stump up money to rescue it, or to allow a new share issue (thus devaluing existing shares), then the Gov't would have to intervene to ensure the taps keep flowing with water, but that's a case different from "nationalising all water companies".

It's simplistic in the extreme if anyone were to think that "nationalising it" fixes everything. Yes, it shouldn't ever have been privatised, but no, a government deciding to reverse that model with water would have huge adverse consequences, as well as creating some opportunities to run it all differently. But stuff would still need fixing, people would still see bills rise, pollution would still need stopping and reservoirs building.

 

After 35 years of extracting profit, if they can’t continue to make the level of profit they want in the next 3 years, just because some woke trouble maker doesn’t want to see turds on the beaches, the rest doesn’t matter.

 

[blandy]

17 minutes ago, chrisp65 said:

 

After 35 years of extracting profit, if they can’t continue to make the level of profit they want in the next 3 years, just because some woke trouble maker doesn’t want to see turds on the beaches, the rest doesn’t matter.

That’s where the government needs to enact law. Clearly from reading that, the shareholders are calling a bluff along the lines you outline. But that needn’t be the end of the matter. Let’s assume that the current law requires that company to provide a level of service to customers and to meet certain standards or else punishment. If the punishment is worse than the hit to shareholder returns, then the choice is different to that they’ve made as detailed in the letter.

One current problem across services that have been privatised is that it’s private profit when things go well, then the public has to pick up the pieces if it goes pear shaped. That should not be the case. It’s happened with trains and buses and energy…and banks, too, though they were not once nationally owned (in living memory at least).

Leaving the EU hasn’t brought all that about and membership didn’t stop the Tories doing Tory things. But them having done it, I’m certain that reverting to 1970’s public ownership isn’t the answer.

[Stevo985]

22 hours ago, bannedfromHandV said:

It’s almost as if water management and supply should be nationalised and ran as not for profit……if you can get your head around that crazy notion.

The fact that anything where you literally don't have a choice which company you use can be privatised in the first place is mental

[desensitized43]

Am I missing something?

The company is unviable and potentially insolvent and the shareholders are unwilling to provide it with the capital injection to continue. Surely the thing just goes into administration and the government create a new entity, buy the assets and the debt gets wiped out? The old shareholders get **** all and we get a shiny new co with none of the debts, as tax payers we’d still need to pump some capital in to get the infrastructure up to standard but that’s surely something that’s worth the investment, from a state perspective?

[tinker]

2 minutes ago, desensitized43 said:

Am I missing something?

The company is unviable and potentially insolvent and the shareholders are unwilling to provide it with the capital injection to continue. Surely the thing just goes into administration and the government create a new entity, buy the assets and the debt gets wiped out? The old shareholders get **** all and we get a shiny new co with none of the debts, as tax payers we’d still need to pump some capital in to get the infrastructure up to standard but that’s surely something that’s worth the investment, from a state perspective?

This is how I see it as well, must be niave I suppose. The administrators would still keep it running while trying to sell the assets off which could be brought back cheaply. 

[blandy]

24 minutes ago, desensitized43 said:

Am I missing something?

The company is unviable and potentially insolvent and the shareholders are unwilling to provide it with the capital injection to continue. Surely the thing just goes into administration and the government create a new entity, buy the assets and the debt gets wiped out? The old shareholders get **** all and we get a shiny new co with none of the debts, as tax payers we’d still need to pump some capital in to get the infrastructure up to standard but that’s surely something that’s worth the investment, from a state perspective?

Kind of. But it’s an everybody loses scenario. I believe BT workers and Uni workers pension funds are significant shareholders. So those people suffer too. All the contractors and creditors who are owed money, they get shafted to the tune of close to 2 billion quid. And the public, we get shafted, because the work to stop the pollution and leaks and repair sewers and the like. That still needs doing and paying for. So now the taxpayer has to pay for it. Taxpayers in Brum and Manchester have to pay to fix London’s water.

It’s the worst option, but potentially the final option if all others fall through.  Other options include the government giving (via OFWAT) some wider leeway for the company to sort shit out - more time over which to spread the costs and then the shareholders pump more money in. But that lets the company fail to meet standards when other companies are not given that permission.

like I posted earlier it’s kind of a who blinks first, bluff calling stage at the moment.

 

[desensitized43]

5 hours ago, blandy said:

Kind of. But it’s an everybody loses scenario. I believe BT workers and Uni workers pension funds are significant shareholders. So those people suffer too. All the contractors and creditors who are owed money, they get shafted to the tune of close to 2 billion quid. And the public, we get shafted, because the work to stop the pollution and leaks and repair sewers and the like. That still needs doing and paying for. So now the taxpayer has to pay for it. Taxpayers in Brum and Manchester have to pay to fix London’s water.

It’s the worst option, but potentially the final option if all others fall through.  Other options include the government giving (via OFWAT) some wider leeway for the company to sort shit out - more time over which to spread the costs and then the shareholders pump more money in. But that lets the company fail to meet standards when other companies are not given that permission.

like I posted earlier it’s kind of a who blinks first, bluff calling stage at the moment.

 

I see the thing about pension funds all the time. It’s just an excuse not to do anything. We can’t nationalise it because the pension funds, we can’t let it go into administration because the pension funds, we can’t fine them for shit performance because the pension funds.

It’s **** blackmail.

[blandy]

1 hour ago, desensitized43 said:

I see the thing about pension funds all the time. It’s just an excuse not to do anything. We can’t nationalise it because the pension funds, we can’t let it go into administration because the pension funds, we can’t fine them for shit performance because the pension funds.

It’s **** blackmail.

Yeah, it is a kind of blackmail  - like I said "who blinks first" at the moment. But it is a reason to consider that if the government is forced (they really don't want to, for all kinds of reasons) to take over a failed private utility company, and as you say "The old shareholders get **** all" that (in this case) BT workers and Uni workers will suffer as their pension schemes will lose a ton of money from their pensions....and in the course of time, the government will have to act to help them.

I'm not proposing a course of action, just pointing out that the utter mess, whichever way it's dealt with, will have wider consequences than it might appear at first. It should never have been privatised, but once it has been, you kind of can't get the egg yolks back out of the omelette without hurting all kinds of innocent people, whichever way you try - taxpayers, BT workers, Lecturers, Hedge funds, employees of the water company, creditors owed money for work they did for the company...customers...

These companies, knowing they can basically just throw in the towel and walk away, leaving us all to pick up the pieces, it's quite wrong.

[chrisp65]

I think it’s a case of **** around and find out for the business world. We can’t have open access to everything for the extraction of profit, even from drinking water. With us supposed to be so grateful to these people that once their profits are threatened we bail them out. We need a fundamental recalibration of our relationship with profit driven international capitalism because for 40 years now we’ve been told its the only thing that will make life better and save us from declining standards and that’s clearly demonstrably absolute bollocks.

[sidcow]

4 hours ago, blandy said:

Yeah, it is a kind of blackmail  - like I said "who blinks first" at the moment. But it is a reason to consider that if the government is forced (they really don't want to, for all kinds of reasons) to take over a failed private utility company, and as you say "

The old shareholders get **** all" that (in this case) BT workers and Uni workers will suffer as their pension schemes will lose a ton of money from their pensions....and in the course of time, the government will have to act to help them.

I'm not proposing a course of action, just pointing out that the utter mess, whichever way it's dealt with, will have wider consequences than it might appear at first. It should never have been privatised, but once it has been, you kind of can't get the egg yolks back out of the omelette without hurting all kinds of innocent people, whichever way you try - taxpayers, BT workers, Lecturers, Hedge funds, employees of the water company, creditors owed money for work they did for the company...customers...

These companies, knowing they can basically just throw in the towel and walk away, leaving us all to pick up the pieces, it's quite wrong.

But haven't these pension funds also been enriched by years of OTT dividends that the business really shouldn't have been generating and paying them? 

Also, pension funds shouldn't have over reliance on any one investment. They should have a broad spread.  Companies go bust all the time.  It's something that happens and the fund should be able to withstand the shock. 

[Rds1983]

13 hours ago, chrisp65 said:

I think it’s a case of **** around and find out for the business world. We can’t have open access to everything for the extraction of profit, even from drinking water. With us supposed to be so grateful to these people that once their profits are threatened we bail them out. We need a fundamental recalibration of our relationship with profit driven international capitalism because for 40 years now we’ve been told its the only thing that will make life better and save us from declining standards and that’s clearly demonstrably absolute bollocks.

Private profits, public losses. 

[blandy]

12 hours ago, sidcow said:

But haven't these pension funds also been enriched by years of OTT dividends that the business really shouldn't have been generating and paying them? 

Also, pension funds shouldn't have over reliance on any one investment. They should have a broad spread.  Companies go bust all the time.  It's something that happens and the fund should be able to withstand the shock. 

Yep, I agree with that.  It’s an interesting contrast to look at who has been allowed to own critical national infrastructure like water and power and compare that to Tories doing their nut and blocking forrins from owning the Daily Telegraph, their in house loo roll of choice.

Many if not all the water companies have set up matrixes of companies that shuffle funds between them, such that the declared dividends to shareholders are only a part of the money going out (and, to be fair, in). And the government and Ofwat have, unsurprisingly, been behind one or more steps behind in terms of stopping it.

[Xann]

On 28/03/2024 at 17:40, chrisp65 said:

fter 35 years of extracting profit, if they can’t continue to make the level of profit they want in the next 3 years, just because some woke trouble maker doesn’t want to see turds on the beaches, the rest doesn’t matter.

The mugged off are so conditioned to eating the shit that's dished out they can't imagine anything else.

[markavfc40]

Just seen in the news that despite us having experienced the wettest 18 months since records began the UK could face water shortages if this summer is hot and dry, which whilst not wanting to state the obvious is a possibility in summer. The reasons for this are that we are not storing our water properly with no new major reservoirs having been built in the past 30 years, rivers have been engineered to move water quickly so it runs into towns and cities (causing floods) and many wetlands have been drained then farmed or built on. All of this means that all the rainwater we get is not being stored properly but causing floods followed by water shortages in summer. 

[Genie]

27 minutes ago, markavfc40 said:

Just seen in the news that despite us having experienced the wettest 18 months since records began the UK could face water shortages if this summer is hot and dry, which whilst not wanting to state the obvious is a possibility in summer. The reasons for this are that we are not storing our water properly with no new major reservoirs having been built in the past 30 years, rivers have been engineered to move water quickly so it runs into towns and cities (causing floods) and many wetlands have been drained then farmed or built on. All of this means that all the rainwater we get is not being stored properly but causing floods followed by water shortages in summer. 

I’m 0% surprised 

[OutByEaster?]

On 29/03/2024 at 17:39, blandy said:

Yeah, it is a kind of blackmail  - like I said "who blinks first" at the moment. But it is a reason to consider that if the government is forced (they really don't want to, for all kinds of reasons) to take over a failed private utility company, and as you say "

The old shareholders get **** all" that (in this case) BT workers and Uni workers will suffer as their pension schemes will lose a ton of money from their pensions....and in the course of time, the government will have to act to help them.

Isn't most of that going to happen anyway, regardless of where the ownership is - in private hands the share price is going to collapse and the pensions will be affected, if it's nationalised the shareholders will bear the brunt and the pensions will be affected. In both cases the taxpayer foots the biil, but if it's left privatised, then we just set up another lap of the track where the equity owners will rinse it for shareholder profits and put us back here again in six or seven years time - if we're going to pay for it, surely it's better that we end up owning it and try a different way forward.

It's already broken - patching it up and giving it back to the people that broke it, who will have no intention at all of changing the behaviour that broke it, can't be the best way forward surely?

 

[limpid]

2 hours ago, markavfc40 said:

Just seen in the news that despite us having experienced the wettest 18 months since records began the UK could face water shortages if this summer is hot and dry, which whilst not wanting to state the obvious is a possibility in summer. The reasons for this are that we are not storing our water properly with no new major reservoirs having been built in the past 30 years, rivers have been engineered to move water quickly so it runs into towns and cities (causing floods) and many wetlands have been drained then farmed or built on. All of this means that all the rainwater we get is not being stored properly but causing floods followed by water shortages in summer. 

It's okay though. London and the South East are most at risk, so the magic funding tree will build some high speed water mains to London. Not a water grid though, they can't justify spending for that, just London.

[blandy]

1 hour ago, OutByEaster? said:

Isn't most of that going to happen anyway, regardless of where the ownership is - in private hands the share price is going to collapse and the pensions will be affected, if it's nationalised the shareholders will bear the brunt and the pensions will be affected. In both cases the taxpayer foots the biil, but if it's left privatised, then we just set up another lap of the track where the equity owners will rinse it for shareholder profits and put us back here again in six or seven years time - if we're going to pay for it, surely it's better that we end up owning it and try a different way forward.

It's already broken - patching it up and giving it back to the people that broke it, who will have no intention at all of changing the behaviour that broke it, can't be the best way forward surely?

I guess the share price will currently reflect the situation - uncertainty over the future, and without looking it up, I assume it's fallen recently. If the company and the government come to some sort of compromise then things (and the share price) will change again (back upwards).

The current situation, where the shareholders are refusing to put in 500 million more quid, [because (in their view) it's just gonna be money down the drain for them, as they don't view the constraints of Ofwat to make cash injection tenable] is them playing hardball as a gambit, really, I think. It's a move to try and get some concession around the stringency and timeframe of the regulatory requirements Ofwat imposes (under the direction of parliament). So like I say, if there's some alleviation of that, then the share price goes back up, the shareholders inject the cash, and the customers of Thames water get higher bills, but the Taxpayer generally does not pay. It's a split cost between the shareholders and the customers.

Thames water's profits have slumped, and it's got a mountain of debt (much of which was accumulated via paying out dividend historically). Essentially, currently and recently its income is not enough to cover daily costs plus obligations to fix all the stuff that's decrepit and broken and lacking. And the shareholders won't give it more money, and so far borrowing more from other markets looks a non-starter. So yes they're potentially up shit creek.

The thing is, and this is where I guess we see the solution differently, I think that changing the ownership of the company makes zero actual problems go away. The things that need fixing, in terms of infrastructure and pipes and stuff need fixing whoever owns it. The cost will be the same under either ownership model. Being parochial in the extreme, why should my taxes go up to fix a bunch of stuff caused by a privatised London company's mismanagement and shenanigans? The shareholders, directors and (sadly) customers need to be on the hook for the fixes.

You're right about the behaviour of the people that broke it, and that's where they need to be held accountable and held responsible for fixing it, not given the easy way out of just hand it all back and leave us lot to pick up the pieces. Ban them from holding directorships, fine them, lock them up if they've done anything criminal. Stop the transfer of assets from one part of the web of companies (the actual, regulated, water bit) under the Thames water umbrella to another part(s). They've properly taken the piss, and the tories have let them.

But anyway, I'm pretty sure it's not the end of the saga. And, also, while Thames water is particularly rotten and broken and may end up (worst case) back in public ownership, it's not the case with every other water company - a national, er, nationalisation of all the companies is unnecessary in terms of addressing the various problems. It might be ideologically preferable, but given the general state of everything, there are bigger issues that need sorting out first, and time and resources spending on, for the next government.  

[chrisp65]

Thames Water was debt free when it went private. It’s paid out dividends, given out favourable loans, not planned for the future, and got itself £18 billion of debt.

If I did that, the police would be around.