As big bill hikes loom to fix the problems caused by water companies whose failures are now being used to blackmail even more money out of billpayers, we take a look at what is going on behind the scenes. Shockingly, our new government appears to be fearful of upsetting the big financial interests at the heart of the water industry scandal.
Let's hope that the fact that on the run-up to the election, the Labour Party took a £4 MILLION donation from a hedge fund similar to those now being allowed to prey on Thames Water's distress won't influence its decisions.
This is the Open Democracy investigative journalism article on that story.
Thames Water is on the edge of financial collapse, so much so that Ofwat cannot even penalise it for its misdeeds for fear of tipping it over the edge.
Quite a clever position for a company to get into when it wants an excuse to hike bills by up to 59% to bail it out of a mess it got into by extracting way too much money for shareholders.
Despite the claims, the water industry is really only financed by billpayers, and loans paid for by billpayers. They, aka we, are the main or exclusive source of income. You might hear government Ministers, Regulators, and Water Industry bosses talking about attracting more investment to the sector but in reality, it hasn't happened - over 34 years. Yes you read that correctly - it hasn't happened.
Where loans were taken out, often just to increase dividend extraction, who paid the interest and provided the guaranteed income on which to base the loan? The bill payer.
Thames Water, like all of the English and Welsh companies was privatised debt-free but now owes about £19 billion (imagine if that had been spent wisely on the assets and hard-working staff who try to make it work).
Who pays for that? - the billpayer to the tune of about 30p in every pound of the bill - not the 3p claimed by the company this year.
Water bills are set every five years by the Economic regulator, Ofwat, in something they call the Price Review. This one is called PR 24 and, before Christmas, it will decide how much we will all pay to finance what has become a company that should have been wiped out and replaced by a better one long ago if it had not been a monopoly supplying an essential product - water. The same goes for all other water companies.
To get to grips with this now well-known scam, the intentions of the new government are set out in proposed legislation, the uninspiring Water (Special Measures) Bill, where we can see lame attempts to interfere with bonuses and 'get tough' with water bosses yet again, but this gesture is undermined in credibility by the ever-present failure to apply perfectly adequate existing law - and, of course, that keeps pollution very profitable - so that it doesn't frighten off 'investors'.
That's right, those financial institutions that don't invest at all - just buy a resaleable ticket to an annual harvest of billpayers' cash and cleverly extract it.
We don't mind paying more for a service if it's going to make things better - but we do mind giving money away to people who are giving nothing in return and just taking funds that could be spent on delivering improvement. And let's not forget some people cannot afford to pay and should certainly not be forced to pay to wealthy financial predators or parasites.
'Ofwat says its regulatory framework has “enabled £200bn of investment since privatisation”
That hits the nail on the head. 'ENABLED' - the admission that the investment did not come from shareholders - it came from the billpayers - all of us - who have paid about 40p to shareholders for every £1 of our money that claim they have' invested' in the business.
Here is our report to Ofwat in full
So why is the government not placing Thames Water into Special Administration,? This is a legal process designed to take control, protect the country's interests and allow an effective solution to be found when the wheel comes off - as it spectacularly has.
Instead, of taking control, the government is allowing hedge funds and other financial vultures to circle Thames Water and we now await a High Court hearing starting on 17 December, to try to agree a ridiculously expensive £3Billion loan at an interest rate of 9.75% PLUS LARGE FEES that will have billpayers funding the continuing scam that privatised water has become.
Seriously, would you take a loan that sounds like one of those payday loan shark scams? Well you may be forced to by your own government to do just that. It is standing by and watching, when it should be involved and controlling our fate.
The government could end this right now, by the way, and it would cost far, far less than the £90 Bn they claim (a water industry-sponsored deceit from 2019) and would soon have the billpayer on a better deal.
Instead, Billpayers are being tricked and forced into a stealth bailout of water companies.
Let's end on this thought from Genesis - the band, not the book.
From the song "Firth of Fifth" which appeared on the 1973 album presciently titled 'Selling England by the Pound'.
'The sheep remain inside their pen,
Though many times they've seen the way to leave.'
Privatised water is a primarily cash extraction tool, not a service industry It does not have to stay like this and if we stand by and just grumble as this is done to us, we deserve all we get.
On 9 December (tomorrow) two events will take place.
At 1130 the impressively well informed WeOwnIt will hold a block the bailout demonstration at the Defra Offices
At 7PM WASP and our colleagues, the Ilkley Clean River Group, Save Windermere, SoS Whitstable and the Henley Mermaids will host a drop-in event for MPs at Westminster where they will hear from highly qualified experts in the fields of Law, Economics, Accounting and Data Analysis (guess who). Please remind your MP to look for the event in the Boothroyd Room on their House of Commons calendar. Just send them an email.
And finally - at 9PM look out for Panorama presented by the super knowledgable Joe Crowley - prepare to be appalled.
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