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Politics, politics, politics (so long and thanks for all the fish)

But if Thames Water makes £500m to £1b a year in profit, why is our government not seeing any of that?
This is probably the most pertinent point of your post. It belies your true instincts and why you feel the need to ask the rest of the questions you do.

It's far more important to ask why any government should see any of that. What right do they have to take that money from private enterprise and private investors, wring it through the waste machine and hand out what's left to those who didn't create that wealth?
 
This is probably the most pertinent point of your post. It belies your true instincts and why you feel the need to ask the rest of the questions you do.

It's far more important to ask why any government should see any of that. What right do they have to take that money from private enterprise and private investors, wring it through the waste machine and hand out what's left to those who didn't create that wealth?

1. Because the water infrastructure has been paid for by the state - by people paying taxes
2. Because there is no competition. Who else are you going to get your water off?
3. Because say £20b a year earnt from such companies is a massive amount of money that would save you paying tax; or in your words - give you an extra bottle of wine a month.
4. Because, as you put it, we should not pay any more taxes than are necessary.

What are my true instincts?
 
1. Because the water infrastructure has been paid for by the state - by people paying taxes
2. Because there is no competition. Who else are you going to get your water off?
3. Because say £20b a year earnt from such companies is a massive amount of money that would save you paying tax; or in your words - give you an extra bottle of wine a month.
4. Because, as you put it, we should not pay any more taxes than are necessary.

What are my true instincts?
You have a clear tendency towards redistribution and some kind of magical thinking belief that somehow the state can reverse all of history and somehow remove the waste that is inherent in any system without competition.
 
You have a clear tendency towards redistribution and some kind of magical thinking belief that somehow the state can reverse all of history and somehow remove the waste that is inherent in any system without competition.

I don't think I do believe in 'redistribution'. I think we all pay too much tax.

It is quite simple: if Thames Water makes £1b profit a year, whilst conforming to the regulator's demands ensuring quality and investment, why can't Thames Water be run in exactly the same way but we, taxpayers, take the profits? It is us that is paying for the water after all.

That would be £1b a year less tax required from you and everyone else. Thames Water is just one company. Add up all the profit from companies providing water, electricity and gas and you would save a significant amount of tax. The current privatised setup has created a perfect setup to simply transfer this wealth back to you, and all of us, for decades.

Anyone who had an ideological issue with it, well they could opt out of the tax break these profits would provide - so you could simply pay more tax if you didn't want to partake! :)
 
I don't think I do believe in 'redistribution'. I think we all pay too much tax.

It is quite simple: if Thames Water makes £1b profit a year, whilst conforming to the regulator's demands ensuring quality and investment, why can't Thames Water be run in exactly the same way but we, taxpayers, take the profits? It is us that is paying for the water after all.

That would be £1b a year less tax required from you and everyone else. Thames Water is just one company. Add up all the profit from companies providing water, electricity and gas and you would save a significant amount of tax. The current privatised setup has created a perfect setup to simply transfer this wealth back to you, and all of us, for decades.

Anyone who had an ideological issue with it, well they could opt out of the tax break these profits would provide - so you could simply pay more tax if you didn't want to partake! :)
It's not that simple, because it never happens. Nothing in this world ever stays still and if businesses could get away with just doing what they did yesterday, people like me wouldn't be needed. Businesses would just tick along being fine, but they don't.

The government can't just carry on as they were, they need to manage and run those businesses - something they've proven themselves to be incapable of doing.

Worse than that, what gives them the right to just take businesses in that way? Most people on this forum have part ownership of those businesses, my sons do (or will when they hit 18) - pension funds, ISAs, etc all own parts of those businesses. The government has no moral ground to take those businesses.

And what do you think that would do to UK investment? Who the hell would invest in the UK under the knowledge that if they're profitable enough then the government will just unilaterally decide that company now belongs to them at a price of their choosing?
 
Its a fair question.
But the question of morality also needs to be "what right does a company have to profit from essential services where alternatives exist". That a question about how you feel about your community.

Essential services such as water, power, rail (debatable) should be run as a service, not a business. They should be seen as a factor of production (as should overall citizen health and happiness.) - I know greasy capitalists struggle to understand that they actually need workers and making people's lives better is a hazard.
 
It's not that simple, because it never happens. Nothing in this world ever stays still and if businesses could get away with just doing what they did yesterday, people like me wouldn't be needed. Businesses would just tick along being fine, but they don't.

The government can't just carry on as they were, they need to manage and run those businesses - something they've proven themselves to be incapable of doing.

Worse than that, what gives them the right to just take businesses in that way? Most people on this forum have part ownership of those businesses, my sons do (or will when they hit 18) - pension funds, ISAs, etc all own parts of those businesses. The government has no moral ground to take those businesses.

And what do you think that would do to UK investment? Who the hell would invest in the UK under the knowledge that if they're profitable enough then the government will just unilaterally decide that company now belongs to them at a price of their choosing?

Nonsense.

Currently, these utility companies have a CEO who adapts and runs the business to be profitable and conform to the regulatory rules. They adapt just as any other business does. Nothing would change other than the profits going back into the Exchequer. Why is that so hard for you to get your head around? The reason state-run industry hasn't worked is because they are not run like private firms. In this suggested setup they could be.

These utilities have time-limited licenses, or they can be bought back. No one is suggesting grabbing businesses illegally. You invest in UK utilities for your sons? Bit of a stretch to say most people own these companies (EDF Energy, for example, is French). However, if profits go back into the Exchequer then everyone in the UK would truly share in the profits. And that would make sense as everyone in the UK is paying water and gas etc bills. EDF Energy is a french company partly owned by the French state. Are you suggesting we should be generating money for France? Allowing them to profit from our electricity service, taking money out of the UK? We are subsidizing French taxpayers, rather than our own!

What would it do to UK investment to legally set up state ownership of state utilities as is common in other advanced economies, such as France or Germany? Nothing. Companies like Thames Water don't bring investment. They take money out, they don't put it in. Thame Water are now being forced by the regulator to invest more into a new super sewer, but that only comes out as a % of their profits. For years Thames Water, controlled by an unknown offshore company not paying tax, took £1b a year out. Easy money. Now Thames water is 'only' making circa £400-500m as some of that massive profit is being reinvested in stopping raw sewage flowing into the Thames river.

Why shouldn't that £500m lower your tax bill or pay for a new school?
 
I agree with some government ownership of essential services, especially where when bring private theres no competition but what I haven't seen is any credible plan on how these companies will be run. So say Labour win and nationalise Thames Water on 1 June 2020, who is going to run that company? There certainly isn't the expertise within government (at the moment at least) to run it so it's likely to fall back - will high quality candidates be attracted to the role when things like share incentive plans probably wouldn't exist, unions would hold more sway etc. They might be but I don't think there's been enough scrutiny yet.

The other part is the valuation, people aren't goint to be pleased when their pension schemes start to plummet with a low valuation, dividends are replaced by long term bonds etc.

On the 80K part, it's a good wage but certainly in London doesn't make you rich. I'd say the below is a fairly common scenario:
- 500K mortgage
- 2 children
- Childcare costs
- 1 car
- Season ticket to commute into London (£300-400)

In that scenario you could probably afford a comfortable life but certainly not a lavish one.
 
Rules regarding the water industry are possibly changing . They are thinking of following suit with the electric and gas and you’ll be able to decide who you buy your water from. The large water company’s will be in the background as they have all the major infrastructure bit like national grid and uk power network.

Large Non household users can already choose who they buy their water from.


As someone who works in the industry and talking to people who were around when it was a nationalised entity they tell me it was not any better than now. Just different. The business was wasteful and the workforce was bloated wasting money left right and centre.
Money would also get funnelled away if it was needed elsewhere I.e national rail for example.
When Corbyn mentioned bringing it all back in house ukPn and Thames Water dismissed it .
 
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@djp82 - any idea how the costs compare now Vs under national governance?

I think a better policy would be to roll out everyone having a water meter fitted so you pay by actual consumption and can also see environmental impact of waste directly in your pocket.
 
I agree with some government ownership of essential services, especially where when bring private theres no competition but what I haven't seen is any credible plan on how these companies will be run. So say Labour win and nationalise Thames Water on 1 June 2020, who is going to run that company? There certainly isn't the expertise within government (at the moment at least) to run it so it's likely to fall back - will high quality candidates be attracted to the role when things like share incentive plans probably wouldn't exist, unions would hold more sway etc. They might be but I don't think there's been enough scrutiny yet.

To true, I want to see nationalisation of services in which we pay far more than our European neighbours HOWEVER like you how they get there, who knows.
 
@djp82 - any idea how the costs compare now Vs under national governance?

I think a better policy would be to roll out everyone having a water meter fitted so you pay by actual consumption and can also see environmental impact of waste directly in your pocket.

No I don’t.

I do believe they are rolling out that water meters will be mandatory in households.

Was just coming from what I’ve been told by people who have worked pre privatisation and are still about.
 
Nonsense.

Currently, these utility companies have a CEO who adapts and runs the business to be profitable and conform to the regulatory rules. They adapt just as any other business does. Nothing would change other than the profits going back into the Exchequer. Why is that so hard for you to get your head around? The reason state-run industry hasn't worked is because they are not run like private firms. In this suggested setup they could be.
So what happens when that CEO is seen as being successful by the private sector and he gets headhunted and offered far more than his current salary? The end result of that is that the private sector always wins, because the government has to be accountable to taxpayers and is always under pressure to limit top end pay. What happens when that CEO retires?

You then have a situation when a government that knows nothing about replacing high performing CEOs has to choose a new CEO - it simply doesn't work. It doesn't work because competition and the need to survive, are intrinsic in creating those circumstances for success.

These utilities have time-limited licenses, or they can be bought back. No one is suggesting grabbing businesses illegally.
That's precisely what Labour are suggesting.

Step me through how doing it any other way works. Lets say there's a contract held by a private company up for renewal on Dec 31st and the government wants to nationalise industry so doesn't renew. How does the government do on Jan 1st what the company did on Dec 31st? Where's the staff? Where's the infrastructure? Where do the phone calls go? Where's the expertise?

The only way the government can do that is to take ownership of the company itself - that's why it's what Labour are suggesting.

You invest in UK utilities for your sons?
Amongst many other investments, yes.

Bit of a stretch to say most people own these companies (EDF Energy, for example, is French).
It's not really. Most large companies are heavily invested into by pension funds, etc.

However, if profits go back into the Exchequer then everyone in the UK would truly share in the profits. And that would make sense as everyone in the UK is paying water and gas etc bills.
And when the state does its inefficient thing and wastes a fortune (as it always does) we end up paying the costs.

EDF Energy is a french company partly owned by the French state. Are you suggesting we should be generating money for France? Allowing them to profit from our electricity service, taking money out of the UK? We are subsidizing French taxpayers, rather than our own!
I can't even begin to describe just how ridiculous a suggestion that is. Should we ban people from buying Italian cars because companies in Italy make the profits? What about wine from France? That's been tried before - East Germany, North Korea, etc. It doesn't work out well.

What would it do to UK investment to legally set up state ownership of state utilities as is common in other advanced economies, such as France or Germany? Nothing. Companies like Thames Water don't bring investment. They take money out, they don't put it in. Thame Water are now being forced by the regulator to invest more into a new super sewer, but that only comes out as a % of their profits. For years Thames Water, controlled by an unknown offshore company not paying tax, took £1b a year out. Easy money. Now Thames water is 'only' making circa £400-500m as some of that massive profit is being reinvested in stopping raw sewage flowing into the Thames river.

Why shouldn't that £500m lower your tax bill or pay for a new school?
Those countries already have state owned utilities - that's very, very different to stealing a public company from its shareholders. What developed nation has done what you propose in modern times? I can't find anything in the last 2 generations and there's good reason. In a world where investors can simply fudge off to wherever they so choose, a nation that is stealing ownership from under them is unlikely to get any inward investment at all.

I know for a fact that everything I have invested for me and my family would be moved overseas and anyone I know with investments would do the same.
 
Ha, ha. Tories caught out again lying about nursing number in the NHS. Saying there will be an 'extra' 50.000 in ten years time, but 19.000 will be made up of current nurses. Seems these fudge wits are incapable of basic maths.
 
Currently, these utility companies have a CEO who adapts and runs the business to be profitable and conform to the regulatory rules. They adapt just as any other business does. Nothing would change other than the profits going back into the Exchequer

You think a top CEO paid millions will take a pay cut to work for the Exchequer?
 
Ha, ha. Tories caught out again lying about nursing number in the NHS. Saying there will be an 'extra' 50.000 in ten years time, but 19.000 will be made up of current nurses. Seems these fudge wits are incapable of basic maths.
1900 that were expected to quit without these measures. So yes, 50,000 more than if they weren't doing anything. ie - the Conservatives are taking actions that will result in 50,000 more nurses.
 
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Ha, ha. Tories caught out again lying about nursing number in the NHS. Saying there will be an 'extra' 50.000 in ten years time, but 19.000 will be made up of current nurses. Seems these fudge wits are incapable of basic maths.

You might regret this post when it comes time for Diane Abbott to announce Labour's plans on police numbers...
 
You think a top CEO paid millions will take a pay cut to work for the Exchequer?

What I am suggesting is the current setup stays exactly the same, apart from one thing, the profits go back to the Exchequer. Therefore said CEO would be happy to continue and be paid the same.
 
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So what happens when that CEO is seen as being successful by the private sector and he gets headhunted and offered far more than his current salary? The end result of that is that the private sector always wins, because the government has to be accountable to taxpayers and is always under pressure to limit top end pay. What happens when that CEO retires?

You then have a situation when a government that knows nothing about replacing high performing CEOs has to choose a new CEO - it simply doesn't work. It doesn't work because competition and the need to survive, are intrinsic in creating those circumstances for success.


That's precisely what Labour are suggesting.

Step me through how doing it any other way works. Lets say there's a contract held by a private company up for renewal on Dec 31st and the government wants to nationalise industry so doesn't renew. How does the government do on Jan 1st what the company did on Dec 31st? Where's the staff? Where's the infrastructure? Where do the phone calls go? Where's the expertise?

The only way the government can do that is to take ownership of the company itself - that's why it's what Labour are suggesting.


Amongst many other investments, yes.


It's not really. Most large companies are heavily invested into by pension funds, etc.


And when the state does its inefficient thing and wastes a fortune (as it always does) we end up paying the costs.


I can't even begin to describe just how ridiculous a suggestion that is. Should we ban people from buying Italian cars because companies in Italy make the profits? What about wine from France? That's been tried before - East Germany, North Korea, etc. It doesn't work out well.


Those countries already have state owned utilities - that's very, very different to stealing a public company from its shareholders. What developed nation has done what you propose in modern times? I can't find anything in the last 2 generations and there's good reason. In a world where investors can simply fudge off to wherever they so choose, a nation that is stealing ownership from under them is unlikely to get any inward investment at all.

I know for a fact that everything I have invested for me and my family would be moved overseas and anyone I know with investments would do the same.


Can't be bothered to splice and dice. A few missives:
  • What happens now if a CEO retirers or leaves? The Board go about appointing a new one.
  • The notion that a foreign state-owned company, that uses our infrastructure, is generating profits for its taxpayers from us rubs salt into the wound. We could be paying that money back into the UK Exchequer, instead, it goes to France.
  • Are company to company buy-outs illegal? Are takeover bids illegal? Of course not. Why would it become illegal if it is the government buying rather than another company?
I know you are just defending the Tory vote, and you are scared people will see this as attractive. Listen I don't particularly want a Corbyn government as they would probably not implement it as outlined here: that these Utilities remain private companies, but with shareholders changing to the UK Exchequer. As others have outlined, if they were nationalised, under the control of government, you would get pressure to pay people more, to be ethical etc etc. Therefore it would be vital that these companies simply remain as private entities that have a regulator as they have today. The more profit they make, the more the people benefit.

Add up all these UK Utility company profits and we're talking billions of pounds a year. Billions that could go towards lower taxes.
 
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