Receiving The Water Bill

DEFRA – to some cynics the Department for Eliminating Farming and Rural Activity – is piloting a Bill through the Westminster Parliament to change how the water and sewerage industry is regulated.

It tells us that “privatisation of the water industry has been successful in attracting over £116 billion of investment… Without this investment, water companies would need to collect all of the money needed to upgrade the infrastructure from their customers, which would make bills around a third higher than they currently are.  Water companies would also have to collect money from customers in the year that they spend it on a ‘pay as you go’ basis, which would make bills more volatile from year to year.  The Government places a high priority on ensuring that the water sector continues to remain attractive to investors…  We need to encourage greater innovation and efficiencies alongside this investment, and to deliver it without undermining the reputation for stable regulation which attracts investors to the sector.”

What utter rubbish!  What economic illiteracy!  Ever wondered how Victorian councils funded all those mighty civil engineering works?  You know the ones – the reservoirs, the aqueducts and the pipelines – that bring water from the hills to the cities, and which now grease the sovereign wealth funds of assorted dictatorships.  They didn’t do it by putting the whole cost onto one year’s rates bill.  They did it through access to capital markets, just as the water companies do now.  They issued bonds secured on the rates for however many years ahead were needed to pay off the debt.  After that, the profits were their own, though some deliberately didn’t think in terms of maximising profits: cheap, clean water was deemed its own justification.  That was in the days when pluralism ruled, the days before totalitarian liberalism intervened to order that every alternative to naked market forces must be shut down.  Except for those clothed in a highly lucrative and stable regulatory regime.

So today it seems the key question is no longer what needs to be done to maximise community benefit.  The key question is how investors can be attracted by having the scent of helpless consumers’ money waved before their nostrils by a succession of tarts posing as governments.  Attracted indeed to take part in what has been aptly termed ‘the tollbooth economy’, one in which the essentials of life are parcelled out among private monopolies.  It’s one where investors are no longer willing to lend to public authorities for a fixed return if instead they can have their own direct slice of the action, and have the poodle politicians to deliver it to them.

Wessex has ten main water suppliers, which are, from the Tamar eastwards, as follows:

·        South West Water (based in Exeter) – once publicly owned, now part of Pennon Group plc

·        Wessex Water (Bath) – once publicly owned, now part of the Malaysian group YTL

·        Bristol Water (Bristol) – always privately owned, currently owned by Capstone Infrastructure (a Canadian investment trust), the Catalan group Agbar (itself partly French-owned) and the Japanese group Itochu

·        Severn Trent Water (Coventry) – once publicly owned, now a public limited company

·        Thames Water (Reading) – once publicly owned, now owned by the Australian-based consortium Kemble Water (some of the shares in which are owned by the governments of Abu Dhabi and China)

·        Sembcorp Bournemouth Water (Bournemouth) – always privately owned, currently part of the Singaporean group Sembcorp

·        Cholderton & District Water (Cholderton) – always privately owned by the Stephens family as part of the Cholderton Estate

·        Southern Water (Worthing) – once publicly owned, now owned by the investor and pension fund consortium Greensands Investments

·        Portsmouth Water (Havant) – always privately owned, now a private limited company

·        South East Water (Snodland) – always privately owned, currently owned by Australian and Canadian investment funds

Why is there more private ownership than there ever used to be, and why is water now such an attractive and secure investment, especially for foreign investors?  Because we have a gutless State that expects our loyalty yet will not exercise its duty to provide and protect the framework of community life.  Its duty now is to the owners of capital and no-one else.  Concerns about financial engineering at the heart of the water industry go unheeded.

This should come as no surprise, given that the British State is irrevocably captured by the City of London.  Every aspect of potential policy is judged by whether or not the City benefits.  The City’s trade is no longer in facts but in fictions.  Without laws and the power of force to compel obedience to them, its wealth, and therefore the standing of the whole British economy, is as fleeting as the blips on its computer screens.  One reason why we as a party support deep cuts in the military budget is because we fear that the military today have no real role in the defence of the realm but exist mainly to enforce the City’s writ at home and abroad.  Third World regimes that seek to repossess their common wealth for the benefit of their own folk will not be tolerated.  (Think Suez.  Think Mossadegh.)  It can’t be allowed, not least because that sort of thing might even encourage us to do the same.

There are some superficially good bits to the Water Bill that will increase the supply to Wessex with minimal effort.  It will make it easier for those with private water supplies – farmers and industrialists – to feed the surplus into the public supply.  It will also make it easier for water companies to trade bulk supplies across their boundaries.  Not exactly a national water grid – which isn’t really practical – but a poor man’s version perhaps.  It’s not the solution because it’s not addressing the real problem.  We’ve noted before that Wessex is running out of water, for domestic and for industrial consumption.  The chalklands are being sucked dry and that’s because nothing must stand in the way of London overspill housing.  That’s the real problem we aren’t allowed to mention.

These measures at the margins aren’t going to transform the industry because they won’t alter the fact that the distribution network is a natural monopoly.  No competitor is going to lay a whole new set of water mains.  As with electricity, gas, telecommunications and railways, somebody owns and operates the network while being forced by the regulator to allow others access to it for a fee.  Those others can be little more than trading and billing operations, with a foreign call centre attached.  They don’t actually get their hands dirty at all.

So if there’s no real competition in the provision of real services, what’s the benefit to the consumer?  There isn’t one: it’s a tollbooth economy.  Indeed, in the water industry there is what is called the ‘special merger regime’, which means that even if a merger offers clear cost advantages to the consumer it might still not be allowed, if the number of companies would fall below that needed for comparison purposes if the regulator is to have any idea of what is really going on.

Public provision would be cheaper, if only the democratic sector would allow itself to have access to capital.  To do that requires a model of State action that is now all but illegal under international law.  The laws are made by the glove puppets of private capital, with or without public consent.  In politics, you can have any colour, it seems, as long as it’s blue.  The ongoing theft of public assets is legal; the repossession of private ones therefore requires first a revolution of the mind.

So the answer is?  Solidarity.  Among decentralists.  It isn’t to fight private centralism with public centralism on the Soviet or Labour model.  It isn’t to sneer at nationalists in Scotland or Catalonia for not seeing the ‘big picture’ and to predict their imminent demise at the hands of global finance.  It’s to recognise how they fit into the big picture, like every other bit of the jigsaw of resistance.  It’s to support local and regional initiatives wherever they may be, and never to lift a finger in defence of the property claims of private corporations.  (They’ve had their chance and they’ve abused it shamelessly.)  It’s to demand not the dissolution of the EU for the benefit of the liberal imperialist nation-states but its transformation into a true Europe of the regions, where subsidiarity really does what it says on the tin.  There’s no shortage of solutions, and never has been, only a shortage of mainstream politicians willing to argue for them.

Scotland and Wales, along with the Crown Dependencies, are part of the seedbank of alternative economic models.  Some better than others, no doubt, but all different from the One Solution imposed throughout the English regions whether we like it or not.

Welsh Water, though initially privatised along with the rest, is now owned by a not-for-profit company.  Scottish Water has never been privatised, despite Gordon Brown’s attempts to put it on the sales list to fund his spending habit.  Scotland’s independence White Paper issues a call for Royal Mail in Scotland to be returned to public ownership.  Scotland’s canals have never left, while those in England & Wales now have.  The Coalition plans to privatise English Heritage, judging conservation to be no part of the core functions of government.  Alex Salmond and his colleagues could hardly be clearer that they won’t be following suit: “This Government does not measure the worth of culture and heritage solely in money – we value culture and heritage precisely because they embody our heart and soul, and our essence."  It’s a different world.  Everything in England that ought to be cherished is regarded instead as a resource to be exploited, preferably by foreign capital; England itself is viewed as nothing more than a base for economic and military aggression.

Why the difference?  It comes down to the fact that in the Celtic fringe the home State and the community are viewed as complementary, not as sworn enemies.  In Scotland’s governance, the contribution of civil society is welcomed as that of a critical friend.  In England’s governance, the contribution of civil society is welcomed as that of an abused domestic servant, carrying the burden of ‘the Big Society’ while the toffs trouser the cash that is meant to pay for the services our government used to provide.

The problem is that it isn’t ‘our’ government and never has been.  The mixed economy and the welfare state were a fleeting illusion in England because England isn’t English.  England is Norman.  Scotland’s constitutional bedrock is the sovereignty of the people.  England’s is that the Crown in Parliament can do no wrong.  It can be held to account only in accordance with concessions it has chosen to make.  Magna Carta doesn’t apply in Scotland because it was never needed there.  It is applauded in England only because the English are the most conquered subjects of all.

Hope lies in the regions, not in London.  The political and economic elites that govern the UK from London are completely interchangeable through the revolving door of jobs and directorships.  That system cannot be taken over.  Labour tried, and failed so miserably that it was Labour that was captured instead.  Increasingly, those in Scotland and Wales now recognise that.  We need to follow them into making our own decisions.  To be English, rather than simply Anglo-Norman, is not to dream of occupying the citadels of power but to deny them the legitimacy they crave.  It is to build the regional alternative, to link up with the technicians and the administrators, with those who are sick of the bankers and the lawyers, with all those who can envisage a better way.

Before nationalisation, the electricity industry included companies with some rather interesting names: the Cornwall Electric Power Company, the East Anglian Electric Supply Company and the Wessex Electricity Company.  In water, there was the Wessex Water Board, later subsumed into the Wessex Water Authority.  In telecommunications, Post Office Telephones had a South-Western Region that stretched as far east as Southampton.  In radio and television, the BBC’s West Region once did the same.  And we once had Wessex Trains.  Wessex has had so many opportunities to get it right, to form a joined-up, self-reliant region within a free England and a co-operative Europe at peace with itself and the world.  So many opportunities.  And every one of them thrown away to take up again the London yoke.  The message needs to be hammered home again and again: if you can’t join them (and you can’t, without betraying all around you), then beat them.