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Bristow attributes blame to “massive underinvestment by private water companies who’ve failed to do their duty.” UK water services were privatized in 1989. Wel

Bristow attributes blame to “massive underinvestment by private water companies who’ve failed to do their duty.” UK water services were privatized in 1989. Welcome to the free market, where actions of rational agents produce the optimal result: cutting corners while getting paid the same and pocketing the difference.

anonzzzies 2y ago
What I have seen in UK on other and several other countries with some utilities (not sure if these sewers apply) is that privatisation happened, which was supposed to be good as we learned from the US (… right …), however, if that happens without competitors, it just means that there is one public now turned private company with money and shareholder pressure and 0 competitors will simply up the pricing, cut corners and do less and less over the years until things break enough to get into the news papers and questions to responsible gov agencies.
- praptak 2y ago
  > if that happens without competitors It does almost by definition. Sewers are a natural monopoly, it's physically infeasible to switch providers.
  - gambiting 2y ago
    Well no, we actually have this model in the UK with internet, electricity and gas - you have one infrastructure maintained by a national operator, but you buy your services from any provider you wish, so there is competition in for example who provides your gas, even though obviously no one comes to your house to change your gas pipes every time you change providers.
    - praptak 2y ago
      > you have one infrastructure maintained by a national operator Yeah I know this model but here the one infrastructure is the service.
      - gambiting 2y ago
        Is there any difference though? The gas you get in your pipes is the service, it doesn't change at all no matter who your provider is. You could imagine a situation where your water/sever infrastructure was maintained by one company but the service is sold by a selection of providers, who then have an incentive to pressure the operator to provide a certain standard of service.
    - pmyteh 2y ago
      It's easy to see how that might be beneficial for Internet: pay Openreach for last mile access but your chosen operator takes over after that. You can see an advantage for electricity and gas if you squint really hard: your supplier is responsible for buying power to add to the grid to serve you, and different suppliers can make different (if heavily constrained) choices. It's really hard to see how this works with water. Upstream of your taps is an essentially fixed set of water collecting infrastructure. Downstream of your waste pipe is a natural monopoly sewer system which collects waste towards a single geographically determined water treatment plant. What is there for a competitive operator to change? The honest answer is that water privatisation was the product of a very specific brand of 80s-00s magical thinking that believed the private sector was necessarily more efficient even without a plausible model of how the efficiencies would happen. There's a reason water and rail were two of the last privatisations, long after all the things like British Airways where there were reasonable grounds to believe the private sector was a better home.
- cjk2 2y ago
  This is resolvable with regulation and operation conditions being in place. We just have very weak regulation in some sectors.
- phatfish 2y ago
  The privatisation of infrastructure with no possibility of competition existing is simply a way to loot the countries wealth like a dictator can. Except it is done under the cover of "free markets".
- eggdaft 2y ago
  Exactly. Just need to build a few more sewer networks so we can have competition. Many fundamental components of society aren’t amenable to market based competition. The public sector can be inefficient, but in many cases the alternative is a form of economic tyranny that is far far worse. In the UK, most of our key infrastructure has been privatised and it has been a disaster for our economy and for the population. One of the likely causes of the UK’s productivity crisis is the lack of investment in infrastructure caused by privatisation, for example. This is all rather self-evident but I’m so surprised how very intelligent, highly educated people often are unable to see that government is sometimes superior to the private sector. It seems their judgements are clouded by dogmatic ideology, but because that ideology is capitalism they are unaware that their dogmatism is no different from the others that they regularly mock and criticise.
cjk2 2y ago
I think the free market is probably a better outcome as long as there is oversight and regulation. The problem is weak regulation. I say that because I remember the nationalised services in the UK in the 70s and 80s and they were a complete mess. My mother spent 1/4 of her life arguing with the gas board, the council and British Rail after things went to crap. It definitely improved when privatised even if it’s not perfect. The public services were not accountable and were completely untouchable to the end user and any legal recourse.
- gambiting 2y ago
  The issue is that the most likely way forward now is forced nationalization and the taxpayer will end up paying for fixing this mess anyway. So if the taxpayer is going to pay for fixing it, it might as well have been a public service in the first place, in the last 30 years it just served enriching foreign investment funds and now when the things are dire the taxpayer will foot the bill anyway. The other option is forcing these private companies to fix those issues through legislation, but they will just take the easy route of going bankrupt or they will lobby the government to either give them money or allow them to increase the bills 2-3x so taxpayers will pay for it either way, and shareholders can keep their billions in payouts.
  - cjk2 2y ago
    That doesn't always happen. Look at TFL in London...
  - librasteve 2y ago
    i prefer the boil the frog variant where the regulators turn the screws by applying financial and criminal sanctions until the private firms are persuaded to play ball … there will be some threats of bankruptcy… that is the game but owners in any guise share / bond /loan holders must be held to account eg force the private firm to default their loan or go to jail
- petersellers 2y ago
  > I think the free market is probably a better outcome as long as there is oversight and regulation. The problem is weak regulation. Public services can be regulated and have oversight, too. What properties do private services have that make them more amenable to being regulated?
blipvert 2y ago
> cutting corners while getting paid the same and pocketing the difference. It’s not even just that. They have borrowed £60billion(!) and given it to shareholders as dividends. People should be in jail.
- librasteve 2y ago
  this
raffraffraff 2y ago
Ireland tried to privatise water a while back. During the "Celtic Tiger" boom that preceeded the global economic crash of 2008, the governed of the time smiled on idea of privatised water, and were also being gently pressured by the EU to introduce it. Before they could do that, the crash happened. The government were pushed by the EU to bail out the banks and socialise the cost. Ireland was particularly screwed during the property crash for a bunch of reasons. First, we had no rent regulation and extremely low quality housing, so if you were renting your simply got screwed. Second, a large number of people had enough land to build a house on. Third, aside from these existing incentives, it's a peculiarity of Irish people that they need to own their own homes. (I say "peculiarity", even though I'm firmly in that camp - frankly I don't understand how other Europeans can sleep at night knowing that they'll rent forever and with no guarantee on the cost, and who knows what might happen to pensions in the future) Anyway, after the then government agreed to bail out Irish banks, the EU put the Finance Minister under pressure to introduce austerity. Up to this point only businesses, farmers etc actually got billed for water but regular citizens were not. It's was paid for under progressive taxation. So when the government tried to introduce water charges and privatisation, the backlash was huge. Arguments raged. Electorate: "Why introduce regressive charges that will disproportionately hurt the poorest?" Politicians: "Other EU have water charges, get with the program". Electorate: "So what? That's not an argument." Politicians: "Actually it's because the infrastructure is crumbling and needs investment, but we have no money because 'austerity'!" Electorate: "Why is it crumbling? Why didn't you invest in it during the Celtic Tiger boom?" Politicians: "Uh... well... That's beside the point! People are wasting water! We need to charge people for overuse!" Electorate: (Does some detective work) "Actually, due to our weather we don't water our lawns or own swimming pools. Our water usage is pretty flat across the social classes, unlike places like California and Florida. In fact our usage is comparable to that of England, who have similar weather and water charges." Politicians: "Ok, by privatising water, the market will make the system more efficient!" Electorate: "How will the introduction of a complex new billing system, meters, social welfare credits and a private company with its own organisational overhead, salaries, profits and bonuses ... make this cheaper or more efficient? Won't they just charge us more, pay themselves more and save costs by not investing in infrastructure? Politicians: "That's just stupid" Electorate: "Look at England" That whole debacle basically destroyed Ireland's Labour Party, who were in a coalition government at the time and backed the water project. They never recovered from that.

anonzzzies 2y ago

What I have seen in UK on other and several other countries with some utilities (not sure if these sewers apply) is that privatisation happened, which was supposed to be good as we learned from the US (… right …), however, if that happens without competitors, it just means that there is one public now turned private company with money and shareholder pressure and 0 competitors will simply up the pricing, cut corners and do less and less over the years until things break enough to get into the news papers and questions to responsible gov agencies.

praptak 2y ago
> if that happens without competitors It does almost by definition. Sewers are a natural monopoly, it's physically infeasible to switch providers.
- gambiting 2y ago
  Well no, we actually have this model in the UK with internet, electricity and gas - you have one infrastructure maintained by a national operator, but you buy your services from any provider you wish, so there is competition in for example who provides your gas, even though obviously no one comes to your house to change your gas pipes every time you change providers.
  - praptak 2y ago
    > you have one infrastructure maintained by a national operator Yeah I know this model but here the one infrastructure is the service.
    - gambiting 2y ago
      Is there any difference though? The gas you get in your pipes is the service, it doesn't change at all no matter who your provider is. You could imagine a situation where your water/sever infrastructure was maintained by one company but the service is sold by a selection of providers, who then have an incentive to pressure the operator to provide a certain standard of service.
  - pmyteh 2y ago
    It's easy to see how that might be beneficial for Internet: pay Openreach for last mile access but your chosen operator takes over after that. You can see an advantage for electricity and gas if you squint really hard: your supplier is responsible for buying power to add to the grid to serve you, and different suppliers can make different (if heavily constrained) choices. It's really hard to see how this works with water. Upstream of your taps is an essentially fixed set of water collecting infrastructure. Downstream of your waste pipe is a natural monopoly sewer system which collects waste towards a single geographically determined water treatment plant. What is there for a competitive operator to change? The honest answer is that water privatisation was the product of a very specific brand of 80s-00s magical thinking that believed the private sector was necessarily more efficient even without a plausible model of how the efficiencies would happen. There's a reason water and rail were two of the last privatisations, long after all the things like British Airways where there were reasonable grounds to believe the private sector was a better home.
cjk2 2y ago
This is resolvable with regulation and operation conditions being in place. We just have very weak regulation in some sectors.
phatfish 2y ago
The privatisation of infrastructure with no possibility of competition existing is simply a way to loot the countries wealth like a dictator can. Except it is done under the cover of "free markets".
eggdaft 2y ago
Exactly. Just need to build a few more sewer networks so we can have competition. Many fundamental components of society aren’t amenable to market based competition. The public sector can be inefficient, but in many cases the alternative is a form of economic tyranny that is far far worse. In the UK, most of our key infrastructure has been privatised and it has been a disaster for our economy and for the population. One of the likely causes of the UK’s productivity crisis is the lack of investment in infrastructure caused by privatisation, for example. This is all rather self-evident but I’m so surprised how very intelligent, highly educated people often are unable to see that government is sometimes superior to the private sector. It seems their judgements are clouded by dogmatic ideology, but because that ideology is capitalism they are unaware that their dogmatism is no different from the others that they regularly mock and criticise.

cjk2 2y ago

I think the free market is probably a better outcome as long as there is oversight and regulation. The problem is weak regulation. I say that because I remember the nationalised services in the UK in the 70s and 80s and they were a complete mess. My mother spent 1/4 of her life arguing with the gas board, the council and British Rail after things went to crap. It definitely improved when privatised even if it’s not perfect. The public services were not accountable and were completely untouchable to the end user and any legal recourse.

gambiting 2y ago
The issue is that the most likely way forward now is forced nationalization and the taxpayer will end up paying for fixing this mess anyway. So if the taxpayer is going to pay for fixing it, it might as well have been a public service in the first place, in the last 30 years it just served enriching foreign investment funds and now when the things are dire the taxpayer will foot the bill anyway. The other option is forcing these private companies to fix those issues through legislation, but they will just take the easy route of going bankrupt or they will lobby the government to either give them money or allow them to increase the bills 2-3x so taxpayers will pay for it either way, and shareholders can keep their billions in payouts.
- cjk2 2y ago
  That doesn't always happen. Look at TFL in London...
- librasteve 2y ago
  i prefer the boil the frog variant where the regulators turn the screws by applying financial and criminal sanctions until the private firms are persuaded to play ball … there will be some threats of bankruptcy… that is the game but owners in any guise share / bond /loan holders must be held to account eg force the private firm to default their loan or go to jail
petersellers 2y ago
> I think the free market is probably a better outcome as long as there is oversight and regulation. The problem is weak regulation. Public services can be regulated and have oversight, too. What properties do private services have that make them more amenable to being regulated?

blipvert 2y ago

> cutting corners while getting paid the same and pocketing the difference. It’s not even just that. They have borrowed £60billion(!) and given it to shareholders as dividends. People should be in jail.

librasteve 2y ago
this

raffraffraff 2y ago

Ireland tried to privatise water a while back. During the "Celtic Tiger" boom that preceeded the global economic crash of 2008, the governed of the time smiled on idea of privatised water, and were also being gently pressured by the EU to introduce it. Before they could do that, the crash happened. The government were pushed by the EU to bail out the banks and socialise the cost. Ireland was particularly screwed during the property crash for a bunch of reasons. First, we had no rent regulation and extremely low quality housing, so if you were renting your simply got screwed. Second, a large number of people had enough land to build a house on. Third, aside from these existing incentives, it's a peculiarity of Irish people that they need to own their own homes. (I say "peculiarity", even though I'm firmly in that camp - frankly I don't understand how other Europeans can sleep at night knowing that they'll rent forever and with no guarantee on the cost, and who knows what might happen to pensions in the future) Anyway, after the then government agreed to bail out Irish banks, the EU put the Finance Minister under pressure to introduce austerity. Up to this point only businesses, farmers etc actually got billed for water but regular citizens were not. It's was paid for under progressive taxation. So when the government tried to introduce water charges and privatisation, the backlash was huge. Arguments raged. Electorate: "Why introduce regressive charges that will disproportionately hurt the poorest?" Politicians: "Other EU have water charges, get with the program". Electorate: "So what? That's not an argument." Politicians: "Actually it's because the infrastructure is crumbling and needs investment, but we have no money because 'austerity'!" Electorate: "Why is it crumbling? Why didn't you invest in it during the Celtic Tiger boom?" Politicians: "Uh... well... That's beside the point! People are wasting water! We need to charge people for overuse!" Electorate: (Does some detective work) "Actually, due to our weather we don't water our lawns or own swimming pools. Our water usage is pretty flat across the social classes, unlike places like California and Florida. In fact our usage is comparable to that of England, who have similar weather and water charges." Politicians: "Ok, by privatising water, the market will make the system more efficient!" Electorate: "How will the introduction of a complex new billing system, meters, social welfare credits and a private company with its own organisational overhead, salaries, profits and bonuses ... make this cheaper or more efficient? Won't they just charge us more, pay themselves more and save costs by not investing in infrastructure? Politicians: "That's just stupid" Electorate: "Look at England" That whole debacle basically destroyed Ireland's Labour Party, who were in a coalition government at the time and backed the water project. They never recovered from that.