The privatised water industry has invested £236 bn since 1990. It plans to invest £104 bn over the next five years.Its real investment rate has been double that of the nationalised industry it replaced. This rate of permitted investment has been too low to keep up with all the extra people invited in to the country, and too low to deal with all the worn out and leaking pipes it inherited from the nationalised predecessor. It has been sufficient to prevent collapse and too much rationing.
If it had been nationalised that means public sector debt would now be at least £236 bn higher. If borrowed at current rates for 30 years taxpayers would be paying £13 bn more debt interest a year. With all that extra debt the interest rate charged would probably be higher.
All that assumes the industry was nationalised by stealing it from its current owners. The shareholders include UK pension funds like the Universities fund, UK savers, Canadian and Australian pension funds and other overseas investors. Advanced law abiding countries buy out existing owners when nationalising. If a government confiscates assets it leads to a collapse of private investment in that country for obvious reasons.The cost of the nationalisation would be an additional large debt burden on taxpayers.
The present government is right to rule out water nationalisation as too expensive. A nationalised industry would not speed up new reservoirs and sewers and would likely be more restricted on how much it could afford to invest by the state of national budgets. Many people commenting seem to ignore the big costs of the investment which would transfer from private sector shareholders and banks to taxpayers and public borrowing. As they also want lower water bills that would mean less profit or bigger losses by nationalised companies which would need to be paid for out of extra taxes. .
July 28, 2025
Good morning.
Whether it be nationalised or held in privately the consumer one way or another has to pay. Which is the way it should be. Trying to spin things in favour of one or the other is to engage in sophistry. To repeat. The consumer / taxpayer always pays.
What is important that the monopoly, irrespective of ownership, is run properly and with regard to the consumer. As I have mentioned here time and time again, water is VERY special and unique case. It is more a matter of life (literally) and public health. I mean, who wants to see the return of Cholera ?
So a balance has to be drawn between profit and service to the consumer. Coming out with fanciful ideas trying to introduce competition in what is a closed market (monopoly) is simply failing to address the fundamentals of this particular industry.
More work needs to be done.
Reply Gas is also crucial to keeping warm and cooking food, and is a more hazardous substance than water. That is supplied competitively. Why trust the state?
July 28, 2025
Using gas as an example is comparing oranges and lemons. When you burn the gas that’s the end of the transaction. With water wechave effluent and that’s the problem. I will ask for the third day running, if you introduce competition who will be responsible for treating the effluent. It’s hard enough to deal with when it’s a single supplier.
Reply Existing companies remain responsible for effluent they currentky handle, and householders responsible where there is no effluent service. Licenced service providers could bid to take on the service or act as sub contractors. New treatment works might be run by sub contractors, or piped networks might be maintained and operated by new contractors. Markets always generate new solutions better and faster than monopolies.I do not claim to predict all the new ideas people might come up with. Why stop them trying? They will face the same quality regulation as existing providers.
July 28, 2025
To reply :- “Why stop them trying?” indeed but stopping the private sector tying or competing fairly is exactly what Labour and to a only slightly lower degree Con-socialist governments do – rigged markets especially energy, schools, transport, housing and finance, subsidies for some, over taxation of others, restrictive planning, OTT restrictions on building rules, red tape in every direction… Labour now trying to kill private education pay nothing for the state system pay four times over for private schooling. Fee, VAT, for others in tax and tax and NI on the money you need to earn to pay the fees and VAT too!
We have fair competition regulator do we not but clearly the state can rig markets as much as they like!
July 28, 2025
‘The costs of nationalisation’
Privatisation of water may have looked like a good idea to theorists and dreamers – but they were unaware of how things would work out in the real world.
The sharks moved in and asset stripped. Now water is on a very sorry state.
The idea that regulators are effective is laughable.
Reply Pity Labour removed golden shares to stop foreign ownership of key industries
July 28, 2025
The problem was Bliar allowed utilities to be brought by venture capitalists such as the Maqarrie bank. They were immediately drowning in debt together with humongous bonuses paid to their directors. The consumer was servicing the debt so no money for proper investment.
The regulator allowed this to happen.
July 28, 2025
Much truth in this. Very poor regulation indeed, given the way they were regulated this is how the owners were very likely to behave all rather predictable!
Congratulations to the Englands Women’s team, especially England’s goal keeper. They do still however need to learn how to take decent penalties they were all aimed at the middle 50% of the goal – what is wrong with the corners? This especially given that Spain’s goalkeeper was rather too small to be put in full size goals – albeit she did do a good job given her limited height and reach.
July 28, 2025
Thanks to president Trump for pointing out the total insanity of the net zero scam and the need for Europe and especially the UK to limit immigration levels and quality. Alas Miliband, Starmer and Labour will not be listening.
Is Miliband really so dim that he actually thinks that the UK’s war on plant food and energy at 4 times US prices makes sense? This to perhaps reduce world temperatures in 100 years by 1/10,000 of a degree C – all other factors being equal – they will not be! Or is he lying for some other reason?
See Physics Prof. William Happer: Casual brilliance | Tom Nelson Pod #265 videos or his many other excellent ones.
July 28, 2025
Also Elimination of CO2 is a suicide pact and CO2 the gas of life – Professor William Happer.
July 28, 2025
The CCC. DESNZ, Ofgem and Miliband are not “dim”. They know they are sabotaging our energy, economy, national security and democracy with the false CAGW claim and its “solution”, Net Zero. No-one can be that stupid. They intend to continue upon this path until they are removed from office.
July 28, 2025
Visit Guido Fawkes website to see how much some wind farms are being subsidised by, staggering amounts just being wasted on the stupid idea of renewables and Net Zero.
More than Twice as much money being spent in subsidies than the equipment takes in sales, even when these price is 300% above the normal rate. Crazy absolutely Crazy.
Who dreams up these schemes, probably those who have gone to the maths School of Dianne Abbott.
July 28, 2025
Dear Ian Wragg, Yes, Thames Water’s problem is not operational management, which appears to be perfectly competent, but irresponsible shareholders, whose engineering prowess was strictly financial and seems to have left the company undercapitalised.
Critics fail to mention that Thames has recently completed and opened its vast new £5 billion Tideway tunnel under the river to stop sewage and run-off overflows along the tidal Thames – a highly successful engineering project.
Most of that £5 billion was rightly borrowed but the company also needed to raise more risk capital, diluting the value of its existing holdings. The final straw may have been that much of the extra borrowing came just when inflation finally pushed bond rates back up to normal pre-crash levels. Same problem as mortgagors coming to the end of a cheap fix.
To the outsider, it seems likely that shareholders will have to bite the bullet or a receiver will do it for them. Since the operational business is perfectly viable, the market can provide an acceptable solution without more than minatory government intervention.
July 28, 2025
“Critics fail to mention that Thames has recently completed and opened its vast new £5 billion Tideway tunnel under the river to stop sewage and run-off overflows along the tidal Thames”
Not true actually. The design isn’t to STOP raw sewage being pumped into the Thames but rather to REDUCE the amount. Initially the claim is it will reduce the amount by 90-95% but let’s see how it does, both now and in 5-10 years time as London’s population increases.
July 28, 2025
The people who do the work are not the state. We are trusting them
July 28, 2025
You can perhaps trust them to act in their own personal interests given the system and regulation that pertains. They usually do so.
July 28, 2025
Yes, Sir J tells only part of the story. Nothing in this piece about dividends and bonuses, most of which would not be paid out by a state owned enterprise, nor the change in debt, which is why Thames Water is in such difficulty. Returning a bankrupt company to a state owned one would not cost £ billions paid to existing shareholders.
Reply A state company would need to raise equity and debt and pay interest and dividends. Nationalised industries had public equity which paid taxpayers poor dividends as profits were often low owing to bad management.
July 28, 2025
If Treasury bought, say Thames Water, for a nominal sum out of bankruptcy, then the assets would/should come debt free. (bond holders lose their investment along with shareholders, secured debt holders would be treated in the usual way, receiving whatever the market rate might be). There would be no need to pay dividends to the Treasury, they bought the company for ‘nothing’ to provide an essential state service. A new management objective should to provide the best possible service to account payers, and manage the company for the long term, NOT to enrich shareholders. Investment in repairs/renewal and new assets are a multi-decade investment, more easily managed under state owned enterprise. The question to be answered, and I admit it is a conundrum, is where to find competent management who can think in terms of decades, and to give them adequate compensation.
Reply Yes of course the state could buy up cheap assets out of a bankruptcy but then faces the underlying big financial challenge of a) stopping or paying for all the revenue losses (which would reduce minus interest charges ) and b) finding huge sums of capital to modernise and expand capacity which means more state borrowing.
July 28, 2025
New private enterprises would also need huge amounts of capital? They would do it of course if the profit can be made.
I pay £23 per month to Thames Water. That is cheap. I pay £35 for broadband and £100 for gas/electricity. Priorities all wrong – would definitely pay more for water if it was done right. I would also invest directly in a water utilitiy fund without expecting short term gains if it demonstrably improved our water security, conservation and sewage arrangements.
As for management, keep government well out of it in every way. Private management could be incentivised by an appropriate equity share. Any profits keep firmly locked away from Treasury and used to pay down debt or reinvest.
National ownership not nationalised industry?
July 28, 2025
Dear Peter Wood, Why would adminstrative receivers, who have a duty to bondholders, sell a company to the Government for next to nothing when other solutions would protect lenders better? They would be sued to the ends of the earth. Same applies if a company is liquidated and its assets sold .
In the case of a company such as Thames Water, the Government could pull a trick to enforce its will. Ofwat, if it still exists, could refuse to transfer the licence to anyone except the Government. But remember what happened when a previous Labour government deliberately bankrupted Railtrack. The lawyers were summoned and the Treasury even had to compensate shareholders.
Bondholders owed billions would be far more formidable litigants. Whatever the final outcome, the UK’s standing in that market would be damaged for years to come.
July 28, 2025
The priority of creditors in a liquidation of a corporation is a matter of law. Un-secured bondholders can lose all.
https://www.theinsolvencyexperts.co.uk/blog/what-order-does-the-insolvency-practitioner-ip-pay-the-creditors/
July 28, 2025
Reply to reply
Not just bad management, bad government. Who appointed the management and let it be bad for donkey’s years? Had the politicians allowed a reasonable investment programme none of this would have happened, but in all my life government has been chasing money one way or another due to their incompetence in running the economy. How is it that Norway is now one of the richest countries in the world even with high taxes, whilst our oil revenue was spaffed up the wall of unemployment?
July 28, 2025
@Mark B -‘the consumer one way or another has to pay’ It is only ever the consumer paying, they pay everyone wages. With water and here we tend to relate to Thames Water a massive over burdened monolith that is getting continued Taxpayer support everyone gets to pay twice. The set up is just to big and it has been asset stripped to clear the purchasers own debts, not new investment debts.
July 28, 2025
Dear IanB, I am struggling to think what financial aid taxpayers are giving to Thames Water that is not also given to Tesco, Greggs the bakers or Uncle Tom Cobbleigh plc. Railways – now that is different.
July 28, 2025
To reply:- Indeed though reservoir barrage breaches have probably caused far more deaths. Gas, Oil and solid fuels are vital to cope with the large extra heating demand of winter in the UK. If we all switch to heat pumps for winter heating it can up grid demand by circa 10 times on cold days 20 times if you have back up for zero wind days. This means vast investment in generation, back up and the grid, that will largely be wasted for most of the rest of the year! An insane agenda Ed?
July 28, 2025
Though he has that Oxford Classics graduate at the CCC and some half lawyer C Stark to advise him on “energy generation engineering”, energy economics and “Climate Physics” should go well!
July 28, 2025
@Reply – I understand what you are suggesting, but gas isn’t supplied competitively. The actual gas price is fixed and rigged by a government not so independent Quango, its the State keeping friends of friends that cant get real jobs employed.
The Political response is always to supply monoliths as they mirror the State not the market place. The Consumer should be the only arbiter as they pay all the bills
Reply The state rigs retail price but nit the key wholesale price of producing or buying in the gas.
July 28, 2025
They rig the price of producing gas in the UK by banning it or by over taxing it!
July 29, 2025
I think that’s rigging availability rather than price. So instead of still being able to supply demand from UK production over the summer we now have to use imports, and in winter we must import LNG at times from distant places at extra cost. Prices are higher in consequence, but are the outcome of a more import dependent narket.
July 28, 2025
For a few pounds anyone can buy a water testing kit that covers almost all the tests done by/for the DWI. Or you can do what the DWI do and send off a sample to a specialised lab if you have concerns. The DWI advice is here
https://www.dwi.gov.uk/consumers/how-to-report-a-problem/
Both gas and water must meet exacting quality conditions that are constantly monitored before they enter the supply system, and both are liable to be treated where the original supply would not meet specification. Levels of impurities (some at zero) are specified in great detail. Tests are based on continuous sampling. In the case of gas that includes testing the actual calorific value of the supply which varies depending on precise molar composition: that affects the price paid for the metered volume.
July 28, 2025
Natural gas not very hazardous until mixed with air and a spark or two!
July 28, 2025
R to R
But there are alternatives. And once again, Sir John you have missed or refused to address my fundamental point regarding health.
July 29, 2025
Both gas and water are important to the consumer,but in terms of life itself water is crucial.
I fear that you are being too competitive again John.
July 28, 2025
What many people want to know is how Thatcher/Redwood got away with bribing the voters with their own money when selling off state assets at way below their value.
Reply They were sold at market value
July 28, 2025
Many? Show us your poll results.
July 28, 2025
A political reply. They were sold is the point. Who set the share price?
They were priced in line with comparable businesses abroad and markets then determined share prices daily.
July 28, 2025
The question was who set the share price not how it was set
July 28, 2025
If you thought the shares were too cheap you could buy some yourself and profit. Your pension may have done likewise. The proceeds of sale returned money to taxpayers by less need for taxation and borrowing.
July 28, 2025
My question was who set the share price not their value. In any case Sir John indicated that the sale was linked to getting an IMF loan and not reducing taxation and but a cost for borrowing from the IMF.
July 29, 2025
The share price on the original offer was set on the advice of the merchant banks advising on the sale, following their research on how to price it.
July 28, 2025
Once again, I would point out that water privatisation has failed. Yorkshire Water issued a “further notice boil alert” to customers recently, due to excessive levels of coliform bacteria in the drinking water. This follows similar potable water problems in the West Country (cryptosporidium), Kent (E coli) and Hampshire (coliform) areas last year. How much longer will it be before this country has an outbreak of cholera?
The investors in the industry knew the risks when they bought into it. They were happy to take the dividends, invest nothing in the infrastructure, approve the staff bonuses for failure – and now the industry has vulture funds that are buying up the debt.
Enough is enough. For the safety of the public the government must take control ASAP.
July 28, 2025
SG
Why would these incidents not happen under State ownership?
I see many dreadful errors occurring in the State owned NHS.
July 28, 2025
Were state-owwned water companies safer in this regard? If not, your argument falls over.
July 28, 2025
This blog rarely comments on football. However, the Lionesses won the UEFA European Championship Cup yesterday, cheering up the nation with a display of true grit and determination as they sat on the edge of their seats. Congratulations to our ladies. The nation should give them a bank holiday to celebrate!
July 28, 2025
An excellect win for the lionesses, but I believe that we should keep politics and priviledge out of football ….no visits to No10 and no knighthoods, CBEs etc
July 28, 2025
No chance of that, as politician like Kier think there are votes and reflected glory in such invites and honours. Still rathee hopeless at penalties nearly all hit almost directly towards the keepers – and yet they still win on penalties! Our keeper perhaps woman of the match!
July 28, 2025
Knighthoods, CBE’s etc. not done for the game, just to try to make failing politicians look good, but actually achieving the reverse – much like business as usual in that sphere.
July 28, 2025
+1
July 28, 2025
I don’t begrudge genuine football fans Prince William and Princess Charlotte their seats at the final.
July 28, 2025
Indeed the net harm Covid Vaccines, the net harm lockdowns and they spend more on dealing and settling negligence claims from poor maternity care than they do on providing this care!
Have the incompetent appeal court judges allowed Lucy Letby to appeal yet? Who killed all the other babies I wonder when she was not on duty or at other hospitals?
July 28, 2025
Well they won but hardly “excellent”. The teams look fairly even but we had a taller goal keeper who did play well. Virtually all the penalties were dire more like back passes to the goal keepers. They should be scoring 9 out of 10 – this especially against that 5ft ish Spanish goal keeper.
July 28, 2025
LL,
I didn’t watch the ladies football.
Perhaps our women were mostly engineers and scientists and the Spanish ladies were PPE graduates or equivalent?
July 28, 2025
Irrelevant minority game which has been blown up out of all proportion as an achievement by broadcasters desperate for viewers and followers who want to think they have found something real.
The Under 21s didn’t get this kind of exposure and rapture and they are much better players.
July 28, 2025
The women’s game will grow, being relatively new. See how they have come on since they started, their game is far more advanced now. They were banned from playing for nearly one hundred years whereas the men’s game had no such stricture.
July 28, 2025
The Swiss ladies managed to lose 7-1 to an U15 boys team in the run-up to the tournament.
July 28, 2025
The FA ban was 49 years …..and women have been allowed to play since 1970 ….55 years, 55 years to build there support
July 28, 2025
I was more interested in Kerry (the county, not a woman) beating Donegal in the All Ireland Gaelic football final.
July 28, 2025
The nation can’t afford another bank holiday – especially one for so slight a reason.
July 28, 2025
Sir John by 1980 investment in the water industry was just one third of what it was in 1970. Mrs T’s Government elected in 1979 curtailed the RWA’s ability to borrow money for capital projects. At the time RWA could borrow at low rates for water investment.
It was the EU that forced investment due to our poor quality of water as you state. We lump water and sewage disposal together which is a bit misleading. Supplying water is very different to sewage disposal.
I suspect the background behind this position was to privatise the industry a political motive rather than for the benefit of the tax payer. Selling off the silver to keep utility bills low for the time being.
No matter what Government is in charge the utilities performance is affect by Politics and not the wishes of the tax payer. We pay for our utilities by a combination of the bill and tax.
The basic cost to run utilities is determine by reality and not a political view of where the money should come from. It is very clear you can’t run a utility on a 5 year plan the life a Government.
But all this did benefit the bottled water industry and the home water filter industry.
So bottled water for drinking, tap water for washing no swimming in the rivers or the sea, hope the sewage works down the road keeps going and my toilet does not block up.
Reply All public sector investment got cut back by Labour in 1970 s as they bankrupted the country forcing an emergency IMF loan with public spending cuts as conditions of the loan. My advice to get back to growth and sound public finances when Margaret took over was to transfer much public sector nationalised industry investment to the private sector. That way the country greatly increased investment in telecoms, water, gas and electricity without straining public budgets and pushing up government borrowing. Surely better than going bust again or slashing schools and hospitals? The next government is going to face similar choices which is why I am setting this out again.
July 28, 2025
The history of suspensions of investment is long. The QE II reservoir was started in 1936, but work was halted by the War. It did not recommence until 1957, with completion in 1962, when the Queen opened it.
July 28, 2025
Are we talking about the 1976 Sterling crisis when a loan of up to £3.9billion was secured from the IMF to stabilise the pound? The country was not bankrupt just confidence in it. The 1973 oil Crisis did not help.
Could have devalued the pound which would put up import costs but lowered export costs. The cabinet was split on what to do so that did not help. 25% inflation and public spending debt does not inspire confidence.
As it turned out only half the loan was required and some suggestion that the OBR had got their forecasts wrong. Nothing new there.
The thing is Mrs T did not come along until 1979. The loan was secured in 1976 so why was there a need to sell off the country’s utility assets? Privatisation was more to destroy the union power than benefit the Tax Payer.
So we now have nothing to sell or to secure a loan against this time around.
As the main aim of Political Parties is to stay in power they don’t like to say we need to put your utility bill up as we need to invest in plant.
There were 56.21 billion people in the uk in 1976. Say 25% tax payers the Loan cost £3.60 per person
I think if I was asked to spend an extra 30p on my utility bill per month or sell off the infrastructure to foreign organisations. The choice would be simple.
Reply In 1976 the government judged it could not borrow from markets and investors in usual way so it needed an emergency IMF loan . It was effectively bankrupt, unable to get market finance and tax revenues to pay its bills. The Labour and Conservative governments had to accept IMF cuts and targets for a lower deficit
July 28, 2025
But the sell off of utilites was three years after the loan ŵas securred. So not liked to the IMF loan of 1976 it would seem
July 28, 2025
Nationalisation, a simplistic knee jerk from the uninformed/financially illiterate.
July 28, 2025
Not so sure that is true NigL, no harm in the debate. Many well informed comments here on this topic making some simple observations.
Nationalised water industry a total mess. Privatised water industry a total mess.
Unless you are a shareholder I suppose?…
July 28, 2025
Good words …..we need open construct debate …..on many topics
July 28, 2025
The fact is that history shows that nationalisation nor privatisation dose not work in the long term when applied to utilities for some reason.
Nationalisation to keep Politicians happy privatisation to keep share holders happy. Neither approach to keep tax payers happy.
In both cases investment is restricted by Government Labour and Conservative when it suits them.
July 28, 2025
john carswell is making sense in his tweets, if the Conservative party doesnt listen its going the way of the do do.
Reply This is not a Conservative party site. Tell them and tell them what Carswell is saying that you think is right. Carswell when an MP resigned from the Conservatives, then from UKIP, then decided not to stand again as an independent and went to USA. He kept changing his mind and would not work with Conservative Brexiteers, making things more difficult for the cause.
July 28, 2025
sorry john, you clearly know these people better than I do, and have probably tried hard to improve things behind the scenes for many years.
all I can say from the outside of politics, here is the real world, is that many things are obvious and its staggering that our ruling class have a set of consensus between themselves that do not and never will work.
the good plane UK is being flown into a cliff face and things cannot go in like this.
normal politics needs to stop and we need emergency action.
July 28, 2025
Yesterday we saw an example of “that which was new was not good, and that which was good is not new”.
Sure, nationalisation is not the answer and the current problems go right back to the selling off of the old water industry. You were stuck with an underinvested crumbling system (typical Treasury) and buyers who were not going to buy if there was even a sniff of competent regulation. There wasn’t.
So you flogged it off for what you could get and never got around to stiffening the sinews of regulation. By which time the financial engineering had been done, the value had been extracted, the bird had flown. You were too slow off the mark, the damage has been done. How those old hands in the water industry laughed – all the way to the bank.
We are where we are, only competent and patient regulation and control will work. Competent legislation and financial control are the watchwords. The real problem is not the water industry, the real problem as ever is Parliament, that place manages to screw up everything it touches whatever label it has today or had last week. I am not expecting any useful solution.
July 28, 2025
Parliament – rather reminds me of the origin of the camel – a horse designed by a committee.
July 28, 2025
A competent regulator would successfully balance the interests of consumers and the industry. To a significant degree OFWAT was instead beholden to diktats from Brussels via the EU Water Directives which still are overarching law. All our main regulators have seen consumer interests suppressed, but also with poor outcomes for the industries they were regulating. See FCA/BoE, OFGEM, ONR, OFCOM, NSTA, NHS England, etc.
July 28, 2025
Absolutely correct.
One of the many failures of the nationalised water industry before privatisation was the unpredictable annual funding round from HM Treasury and lack of long-term investment commitment.
Much of the current problems have nothing to do with the water companies but are caused by the annual budgeting process with OFWAT and the Government’s past determination to direct OFWAT to keep costs down.
July 28, 2025
Dear Sir John, can you not present the matter on a false alternative basis? It may be true the UK debt is spared by the cost of water investment, but that debt interest you speak of has gone onto water bills instead. Investors haven’t gifted their money to the water companies in compassion for tax payers.
As to stealing from water companies for nationalisation, the water industry was stolen from me when it was sold rather than me and all other UK citizens being given the shares. Don’t tell Sid – what he thought was something he partly owned has been sold to someone else and he got nothing.
Reply Yes of course water customers have to pay the costs of extra investment. The state as a result has a lot less debt, and the water debt is subject to market forces with the risks transferred from taxpayers to shareholders who have chosen to take out the debt.We all benefited from the sale proceeds having to pay less tax to sustain water borrowings by our government. If a water company goes bust the shareholders and lenders take the hit, not you and me as taxpayers. or as water customers.
July 28, 2025
to reply If Thames goes bust both the regulator and industry watchers say that taxpayers will suffer from ‘temporary’ nationalisation and a possible hit to the Thames pension fund.
As an aside all water supplies should be metered.
July 28, 2025
Reply to reply
Not much to show for those tax cuts today. Tax cuts were just a political ploy to bribe the gullible electorate.
July 28, 2025
”The privatised water industry has invested £236 bn since 1990”
That inestment went on water-meters and management bonuses ….and not fixing leaks or extending coastal sewage water pipes further out to sea
Reply Bonuses are not investment spend so not in my figures.Water meters were anEU/ government requirement and did help ration water cutting demand and therefore need for extra capacity. Their choice not mine. Like many my bill fell with metering as I am a careful user, recognising the monopoly company and regulator refusal to supply enough water for all purposes.I do not water my borders or put a sprinkler on my grass or wash my car as often as I would like to be a good water citizen in a socialist rationed water world.
July 28, 2025
Glen
Our water Bill halved when we voluntarily asked for a water meter to be fitted.
According to the Bill I receive each 6 months, we are an average user.
Thus the size of your house was the standard bench mark for cost, now with a meter it is the number of people in it and their use of water that determines the cost.
Council tax should also work the same way, which is why I preferred the Poll tax. system where everyone paid and shared the cost of Council services..
July 28, 2025
Cutting demand – there’s a novel concept for a so-called capitalist society. No mention of meeting demand by supply.
July 28, 2025
Agree, customer demand should be king and not the government/company supply
July 28, 2025
Sir John
You have produced the argument of the poor vulnerable shareholders before, they are not vulnerable they are professionally advised and in these monopolies they are also protected. Its a no risk money deposit with the taxpayer forced into action when things get wobbly to bail them out. Why is the Taxpayer lending Thames Water money and not the investment companies, the financial institutions? They, the company investors have already received payouts equivalent to all the monies they have so-called invested from the sale of assets, that now have to be replaced. That’s not investing that asset stripping.
Then we should get real Thames Water a monopoly with 16 million customers, that was/is never healthy in any market
Don’t get me wrong I believe in privatisation, it is the UK State, Government that is just rubbish at handling it, they sell to the wrong people, at the wrong price, just to remove the burden seemingly from themselves personally, but as there can be no consumer choice, therefore no competition they have created monolithic monopolies that the taxpayer is still the funder of last resort. By all measure of a consumer lead market place, that is not a free market proposition.
I live in a road in Wokingham where one side is Southern, the other Thames. One side gets to enjoy hose pipe bans while the other is all clear. They are supplied by to entirely different connections, just 3-4meters apart, in and out, a leaks don’t affect the area equally – obviously. The bills are not equal, but the kicker you cant swap supplier…
Reply I have never used poor and vulnerable as adjectives with shareholders. Shareholders have to take the losses if their business fails. You make the case well for being able to switch suppliers as you can for energy.
July 28, 2025
Ian B
Yes fortunately we are with Southern Water in Wokingham, no hose pipe ban either “YET”.
July 28, 2025
@Berkshire Alan. – the fear, as they(Company and Government) never seem to learn the company that now owns Southern is the company that bailed out and left Thames in a perilous state.
July 28, 2025
If Ian B wanted to change supplier what chance is there that a team from the new company would come to set up his connection to his new preferred network? Answer as a probability for this to happen please. Also give an estimate of how much he would be charged for this network change.
Reply Might be using existing pipes as common carrier. Might be putting in new pipes like broadband cablers. Will be at a price people are willing to pay as otherwise it wont happen! I thought you were well informed about things!
July 28, 2025
Hefner
Many new organisations will just be “traders” like many of the electricity/gas Companies that have sprung up in recent years. They do not have a single engineer between them, they are simply working the system to suit themselves, buying capacity in bulk at a discount, and selling to the end user for whatever they can get.
Quite why the Producers and real suppliers of all of the Utilities simply do not offer their best price to the customer in the first place, so there is no market for the traders to work, is but yet another topic !
July 30, 2025
Good traders are essential to achieving low cost of supply acquisition (at least as far as law permits, with compulsory funding of renewables subsidies). It’s a highly complex area of the business. Expect higher prices if the trading team is second rate.
Of course such people sometimes think they might be lucky if they strike out as a small team on their own sharing profits rather than a more limited corporate salary even with bonus, but in reality such businesses need good capitalisation because the market can spring surprises that see a massive upsurge in collateral requirements. I am currently trying to decide whether to risk the significantly cheaper offer from one such new company on the block, which may struggle to secure capital as it grows, or find the rules changed to undermine its niche.
July 28, 2025
@Reply – it was they way you singled out pensions and university funds in suggesting that the professional advice they were getting should separate them from any other investor. Hopefully their advisors are very well paid professionals.
With ‘hind-site’ we can all be wise, while privatisation was and is needed, we would all be hard pushed to suggest the way it was done and how it has been handled since gets us to the position of consumer choice, that is what is meant by competition, free market strong companies. The position taken up by Government seems to forget who pays the ‘bills’ it is never Government, it is never the State, It is always the consumer.
Again with ‘hind-site’ the sell-of should not have had the focus of the State off-loading liabilities, in effect dumping them on someone else to pay, but should have had the #1 focus of the consumer, to make the market place consumer driven. That then is everyone’s ‘freedom’
As I said hind-site is wonderful. From where we are today for some of the companies who religiously prove the cant cope, some intervention is required. That could be a number of things, from break-up, 17 million account holding customers has lead to monopoly and abuse, to divestment, separation of water collection, distribution etc – but things as they stand are ‘not right’ The Government has forced companies to break up before,why not now
July 28, 2025
“The privatised water industry has invested £236 bn since 1990.”
“If it had been nationalised that means public sector debt would now be at least £236 bn higher.”
The Conservative government at the time wrote off all water company debts and privatised them debt-free. Since 1990, the amount that the privatised companies have paid out in dividends is about the same as the total debt the companies have taken on.
Offsetting those means that, if there were no dividends paid, the debt would have also been unnecessary (since the debt has essentially simply been transferred directly to the shareholders), and the companies could still be essentially in the same debt-free position that they were in 1990.
The £236 bn has come from us, the bill payers. It would not be added to public sector debt as we the people have already paid for it.
Reply You exaggerate dividend costs
July 28, 2025
Research by the FT published in 2024 showed that net debt accrued by water companies since 1990 was just over £64bn and dividend payments made was £78bn.
The cost of investing £236 bn in infrastructure has been met primarily by us bill payers, not by borrowing. You massively exaggerate the impact on public sector debt.
REply Net debt for investment. Dividends had to be paid out if profits
July 28, 2025
Elsewhere – more amusing
USA/EU deal – MEP Guy Verhofstadt warned it had been “badly negotiated”.
Brando Benifei, the Italian S&D MEP who chairs the European Parliament’s committee on US relations, said: “We seem to have gotten worse conditions than the UK. (Why shouldn’t they?)
Wolfgang Niedermark, a board member of the Federation of German Industries trade body, said the agreement was “an inadequate compromise”, with the EU “accepting painful tariffs”.
France’s European affairs minister has warned the deal will bring temporary stability but looks “unbalanced”.
Trump as suggested elsewhere was piss… to have his holiday time wasted. The big takeaway, POTUS last time in office tried to rebalance things with the EU, they stalled, then stalled some more, they wanted just to keep talking to wear him and others down as is the EU way. The EU has shown they like being the Overlord as their way is the only way, POTUS has learnt from that and knows you how to treat the EU, how to deal with them.
Hey, Ho some balance
Another Like!
Sir John Redwood, a senior Tory backbencher and former minister in the Major government, this morning argues that the EU’s “bad” trade deal shows that Britain should not follow through with Labour’s agreement to follow the bloc on food standards.
July 28, 2025
Whatever the costs, advantages, disadvantages , or moral imperatives of nationalisation; the British are totally incapable of running a nationalised industry to the advantage of its end users or the country. So find a way of doing it that produces a positive outcome.
While we have been asked to ponder such for the past few days much more sinister things are afoot. That monument of uselessness called the Home Office has now set up a police panel to monitor and investigate all signs, in online posts, of criticism of government actions or more likely lack of them on the subject of immigrants. We should really be commenting on these “1984” tendencies of an otherwise useless government.
While I have not entirely picked up on it, there seems to be in the act of discussing it, a trend to legitimise “Sharia Courts”. Is two tier intent on becoming three tier. Such courts should not exist in a sovereign United Kingdom, where English law under the supremacy of Parliament should be the only law.
2TK and his ill educated in life socialist rabble are intent on destroying the U.K. as we knew it. On the positive side, congratulations to our ladies of football who finally triumphed despite the football and acting talents of some of their opponents.
Reply This debate on nationalisation which I am leading is crucial to our public finances and is central to this governments story. GB News, Telegraph, Mail, Philp, Jenrick and Farage doing a good job on freedom of speech.
July 28, 2025
So you’re saying that because Thames Water is in the private sector and is virtually bankrupt no taxpayer’s money at all will be used to rescue it ? Good news.
July 28, 2025
New Labour manoeuvred Railtrack into administration – and I think Starmer’s Labour will try the same trick with Thames Water. Once they’ve done that, nationalisation becomes much cheaper for the government.
I’m not pro-nationalisation – but I’ve never been in favour of having to send my money to Canada or China every time I turn on the tap. I’ll suggest, again, that NS&I should start an OEIC (open to British nationals only), whose objective is to buy up shares in our utilities, so that the dividends and capital gains end up in British pockets.
July 28, 2025
One point missed is that the Water Companies were all privatised with no debt. This gave them the freedom to borrow for long-term investment. Yet they paid excessive bonuses to the management and excessive dividends to the shareholders. The UK has not built a single reservoir for the last 30 years, and we still have excessive leaks and sewage discharge into our rivers and seas.
Meanwhile, All Governments for the last 30 years have allowed unlimited immigration, around 10 million people in total, I believe. So increasing the demand for water, housing, schools, GPs, Hospitals, road space and parking.
Is it any wonder we are in a mess?
July 28, 2025
“If it [water] had been nationalised that means public sector debt would now be at least £236 bn higher. If borrowed at current rates for 30 years taxpayers would be paying £13 bn more debt interest a year.”
As Professor Sir Dieter Helm, Professor of Economic Policy at Oxford, has pointed out, for products such as water, which everybody neds and consumes, the taxpayer and the consumer are one and the same. So the debt is either paid for by taxation or by higher water bills, the latter being more regressive
Reply Charging users helps constrain use and imposes shareholder and bank disciplines on suppliers
July 28, 2025
96 criminals were illicitly shipped, into the UK yesterday on the 27th July from France……
July 28, 2025
You seem to be mathematically and commercially sensible John, I wonder how many other Mp’s bother to do the maths on all of these huge projects, because the vast majority of them should never see the light of day, let alone get off the ground.