Your Water Bills – Down The Drain Of Global Greed

By Heordreedenn:

The privatisation of essential public services has always been championed, at first by Margaret Thatcher’s Tories but now by LibDems and Labour too, as a benefit to the public. The idea is that these services will be sold off to the British public (who owned them anyway when they were publically owned of course!) generating cash for the Government. Then competition between providers will drive down prices and improve services whilst any profits would fund often badly-needed new investment. The example of what has happened to our water supply shows that all this just won’t wash.

In the years since it was privatised in 1989, England’s water industry has gradually fallen into the hands, not of small shareholders, the famous Sid and his ilk, but of often foreign, multinational corporations and shadowy City asset-strippers. Whilst the consumer has not in fact been offered a choice between competing suppliers, But instead but no choice at all as the country’s water supply has been carved up between local monopolists so you can’t choose who supplies the water that comes out of your tap. Or to whom you pay your water bill. You have no choice but to pay whatever they choose to charge.

Unsurprisingly prices have soared and the proceeds largely been trousered in returning profits to the firms’ owners, most of whom are now based abroad. Britain, one of the wettest countries in Europe, has the highest water bills, twice as much as in much hotter and drier Spain and three times as much as in Italy. By no coincidence at all, we have the most thoroughly “privatised” water industry in the world. Nowhere else does Big Business own the whole system, reservoirs, pumping stations, pipes, sewers etc. Nowhere else are people so completely at the mercy of corporate capitalism for the water they need to live. So nowhere else are people so thoroughly and outrageously ripped off.

Over the past ten years, inflation has raised prices generally by 36.1%. But average water bills in England and Wales have soared by an average 64%. This figure would be higher if Wales, where water is owned by a not-for-profit concern and bills have only risen 57%, were excluded.

If you are unlucky enough to live in the area where you are compelled to get your water from Wessex Water, owned by Malaysian power and cement company YTL, who bought it off notorious corporate financial fraudsters Enron, your water bills have risen 83% since 2003. You will no doubt be delighted to learn that over the same period Wessex Water’s Chief Executive’s annual total take in pay, bonuses and perks (excluding lucrative pension pot!) rose by 207% from £260,000 to £539,000!

Meanwhile in Scotland, where water remains in public hands, bills have only risen by 42% in the last 10 years. The Scottish public-provided water is now on average £52 a year cheaper than the English multinational-sold stuff.

Nor is this limited to the last ten years. Allowing for inflation, average English water bills have risen 56%, that’s in real terms, since privatisation in 1989. But the hikes have come higher and faster as the industry has steadily passed out of the hands of small British shareholders and been gobbled up by foreign multinationals and their ilk. More above-inflation water price rises are in the pipeline for 2013-14.

Where does this ever rising impost squeezed out of your groaning wallet or purse go?

Most of it does not go, as one might naively expect, to the cost of actually providing you with water and taking away your sewage. Of the average annual water bill of £388, only £150, just 38%, goes to providing these, to giving you what you thought you were paying for.

Another 32%, under a third, goes to investment in infrastructure, replacing the leaky and creaking, often Victorian vintage, mains and sewers successive Governments of all stripes shamefully neglected in the decades before privatisation. This is money you’d have had to pay out anyway, but if Governments had kept the system in proper repair it would have been spread out over a much longer period and probably would have been less in total, as parts of the system would have been kept in repair all along rather than neglected till they simply failed for good and had to be replaced. How effectively “private enterprise” spends your money here can be seen from the fact that between 18 and 25% of your water leaks out of the system between reservoir and tap. We have one of the leakiest water systems in the World – even Third World Cambodia only loses 5% of its piped water to leakage!

The taxman takes a pretty modest £12, 3%, though of course under public ownership you’d save this amount straight away.

The rest, £103 of your average £388 water bill, 27%, is siphoned off in profit. Obviously if the system was still publically owned this would vanish from your bill. So you are paying an extra £115 a year on average, almost a third more, for the privilege of having privatised water.

Where does that money, YOUR money, go? Abroad mostly. Four of the ten largest regional water monopolies are now completely foreign-owned, and another three are largely so.

For example, Anglian Water, supplying Norfolk, Lincolnshire and surrounding areas is owned by a consortium of “private equity” City asset-strippers 3i and Australian and Canadian pension and infrastructure funds. They are reaping the rewards of above average annual bills of £434, up 56% in the last decade.

Northumbrian Water’s customers hand over their dosh to Cheung Kong Infrastructure Holdings, a multinational based in Red China and run by Hong Kong tycoon Lee Ka-shing. Mr Lee is cashing in to the tune of £359 on average from some of the poorest folk in England, from whom he has inscrutably squeezed a hike of 74% in the last 10 years. Reaping operating profits which have more than doubled over the same period: £388 million of Geordies’ cash went in profit to China last year compared to £165.3 million in 2001-02. Mr Lee also owns Essex and Suffolk Water. He also owns gas supplier Wales and West Utilities and now pipes gas to a quarter of all homes in the UK.

Moving south, Yorkshire Water not only enjoys a monopoly of supplying water to the people of England’s biggest county, it owns vast tracts of the county itself, in which it is one of the biggest landowners. It is itself owned by the Government of Singapore, Deutsche Bank and multinational financial operator Infracapital.

Our nation’s capital’s water supply belongs to Thames Water, which is itself in the hands of Australian bank Macquarie and the investment corporations of Red China, ultimately controlled by and benefitting the Chinese Communist Party, and Abu Dhabi. The Party bosses and oil sheiks have squeezed an extra 76% out of Londoners over the last ten years, but as they are themselves now mostly foreign too perhaps this matters less!

Southern Water has milked price rises of 80% since 2003 for Australian pension fund The Future Fund, US fund UBS and the Hong Kong investment fund Subaya.

South West Water, with the highest bills in the country – a pound light of £500 a year, and they would be £549 if the Government had not got the rest of us to subsidise them from our taxes by £50 a head to try and stem public anger at this racket – is owned by FTSE corporation The Pennon Group, itself owned by a gaggle of pension and insurance firms such as Prudential, AXA and Legal & General. By ruthlessly screwing the people of their monopoly area in this way they have hiked their profits from £107 million ten years ago to £204.7 million in 2011-12. People in Devon and Cornwall may not like paying over £100 more a year for water than anyone else, but they just have to lump it. Like every other water customer they have no choice and can’t take their custom elsewhere. So much for the “competitive market”!

United Utilities, which owns the water supply of the North-West, is the biggest FTSE water firm. They are also the worst for customer complaints, getting 80 per 10,000 connections in 2012.

Severn Trent, a mainly British-owned FTSE 100 corporation supplying the West Midlands, has the lowest average annual bills in the country and inflicted a below average 57% price rise over the last ten years.

All these water prices, incidentally, aren’t set by “market forces”. They are fixed every five years by Ofwat, a State “industry regulator” , which gets cosily round the table with Mr Lee and the rest of the gang and tells them what they can charge and how much they can cream off in profit once money has been set aside for investment in infrastructure.

Even the Government’s somewhat edentate “consumer watchdog”, the Consumer Council for Water, reckons this quango-run Monopoly Capitalist price-fixing cartel has ripped the British public off to the tune of £600 million in excess profits over the last two years alone. Last year, thanks to this corrupt shambles, the nine main English water companies pocketed record profits extorted from the English people of £3.5 billion, much of that sent abroad. Whilst their Chief Executives won’t be worrying about their water bills – last year they trousered over £8 million in salaries and bonuses, averaging nearly a million quid a piece.

Water is a prime example of how “privatisation” rips off the British people and enriches foreign speculators, including in this case oil sheiks, oriental magnates and the Communist Party of China. It’s time the British public took back what is theirs, stopped foreigners and speculators siphoning off profits from supplying our vital needs, and put the strategic commanding heights of the British economy back in the hands of the British people.

By Heordreedenn  © 2013

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