"It's theft!" LBC's water nationalisation debate

text questions come in from Gary and Suffolk why are the water companies allowed to function without competition surely the idea of privatization is exactly to bring about competition the UK water companies are taking us for fools milking customers to pay shareholders and the boardroom vast sums of money whilst avoiding at all costs any investment it's a national scale should be stopped just to give you a little bit of background how old companies are asking customers to potentially uh well they're saying that they might increase bills by up to 40 percent to fund the cost of repairs to sewers in order to end The Dumping of sewage in our rivers and seas meanwhile Thames water could be about to collapse so we read in the papers anyway because of the scale of its debts Peter Hitchens well it's I think quite clear now that some things should be run by the state and some things should be run privately and that water companies should never have been privatized and should always been run by the state as being say is very much true of the railways and there are probably several other things that if we discuss this we could count with the same answer it I think the the case for General privatization the Dogma privatization has been destroyed in the past 20 years and the water companies and what's happened to them is probably the strongest example of that argument and the best experience we shall have it has to be done it's going to be very expensive uh the damage that's been done by these private sessions will have to be reversed by them being taken again into proper efficient thoughtful State ownership of the kind that I say that British Braille exemplified before it was Torn to Pieces by a mad dogmatic experiment Andrew um yeah absolutely this was a a fraud committed against the British people for the last 40 years unfortunately and now we're seeing it collapse um the energy sorry the water companies hiked price is 40 after privatization they fail to invest in the infrastructure that they got on the cheap they sold off some of the assets the reservoirs for Housing Development and so on which is why we haven't got the capacity now to expand as the population has grown and they've loaded the companies with debt so basically asset stripped to companies um you know so we talk about the cost of taking it back into public ownership Thames water's worth nothing it's good but what makes you say is what makes you say that the assets trip to companies You could argue that they haven't invested in us they have loaded the companies with debt yet paying out 3.2 billion pounds worth of dividends to their shareholders in the past 20 years so they've taken on debt they're in debt they're in massive debt and they've handed out money to private shareholders without investing in the infrastructure whilst jacking up our businesses but that was what was designed you know this was built in if you regulated them properly and you know I I hear people saying oh we can regulate them better and find them all they're bankrupt what are you going to find you need to take if you find the other water companies more sternly for take you know put pouring sewage into our rivers and seas they're all going to collapse as well it's like the proteins look we just had a debate about paying for the repair of school buildings and we've talked about you know what other investment uh that that's needed and now suddenly the state is suddenly going to be able to to take back the water companies and perhaps the the railways and everything else and put in money and everything else all you have is a tremendous demand um so the the defra where Jim aspires to be at Secretary of State people beating apart the door continuously saying can I have investment for this can I have investment for that and this demand everything else I'm not going to say there aren't there aren't issues that though there are um when things are privatized the structure that's used the failure of the regulators and others but I think if you compared what the likely investment would be in under State ownership and what it has been it's significantly higher under privatization but yes in terms of money paid out to shareholders investment that is required poor regulation not necessarily the right management but we are talking about obviously the focus on Thames water there are a number of water companies many of whom are run in a far far better more sustainable way do you not think that one of the fundamental until uh planks of a Tory government that is is to allow a return to shareholders I mean what is a what is a reasonable return because obviously you if you're going to attract investment into the sector you're going to have to allow shelters to earn some level of return but that's that's the whole that point about you know if you believe in uh capitalism if you believe in companies the board has to decide that in terms of what is what the money you keep in the company for future investment and what is it you pay out to the shareholders to encourage them to carry on to it's not passing as well because it's a natural monopoly so I can't have another water pipe that's where regulation comes in you could then say well actually you should follow the electricity model where actually we do have a choice about which electricity companies where we're going to go but this is all the infrastructure yeah it's about infrastructure or the infrastructure investment Jim uh well I think we're all um looking at the water industry and there is I think agreement from most people that what happened on privatization was a national Scandal uh the company was handed over uh at a song they were handed over with with no debt whatsoever and with plenty of assets and what we've seen is as Andrew has said those assets have been Stripped Away we've now debt levels of 60 billion pound at the same time dividends of 72 billion pounds has gone out the money was not in their system it's essentially been taken with one hand and piled on with debt in the other now the question console given where we are so if there's an agreement that we shouldn't have done in the first place well I'm afraid that is not the world we're in today the world we're in today is that we have a privatized water industry in England and of course it's not for profit in Wales but but in England and we have to reconcile uh some of that and it's complicated I'm not saying that as an excuse but it's a reality that there are significant pension fund holders who are investors in water in England for instance there are four million uh UK pension fund holders who are invest is including the Mine Workers pension scheme the university superannuation scheme the BT scheme the Tesco employee scheme of people who've invested to get a decent pension into into old age there are also some people who took on privatization share options as employees or water companies or workers and so it is a bit more complicated but it's a matter of fact that there is a lot of our shareholders of English water there are essentially foreign Sovereign what's wrong with that I mean as long as you've got the right to veto if you feel that a foreign hostile government could have your National Assets but if you're talking about Canadian pension funds what's the problem because in the end where's that money coming from that pays them what their expectation in terms of a dividend return on one hand when we have such a gulf in terms of investment required to reduce leakage so we don't have water shortages and also we need to talk about the sewage Scandal there's over 800 sewage discharges taking place every single day polluting our Rivers our lakes and our seas and it's a place of where we live literally the beaches where children build sandcastle you know there are other Industries where the regulator makes it very clear how they expect that industry uh to uh to perform to behave look after the assets and the uh the level of return to shareholders we saw at the beginning of pandemic for example where the bank of England stepped in and said the banks are not going to pay our dividends to uh to shareholders they're going to do the right thing by their their customers and I think you'd argue that by and large that's what happened well that's basically the Labor's plans Nikki remind me when it was that the water industry was privatized 1980s excited well it seems to me to be an awful lot of both conservative and labor governments since then if the regulation was no good uh wouldn't they have noticed and done something about it the truth was nobody cared and nothing was done and we now have a national strategic assay in fact the water supply to the capital city of this country and its most uh its most productive and most densely populated area is now under the control of a body which as far as I understand is on the verge of bankruptcy and that is not tolerable in a civilized country and we're going to have to do something about whatever because I don't think believe in nationalization without compensation if there are shareholders there has to be compensated that's part of the cost and part of the cost which which is which has to be blamed on the on the people who failed you want to come back yeah but to the point of having to do it to the point it hasn't happened any choice we have to do something but to the point of nationalization would labor government nationalize and this is the point I mean I can very easily make a case for nationalization but I think as a point of principle when it comes Peter to your point about compensation for shareholders as a point of Prince as a working person paying my tax I don't want to pay twice I don't want to pay into the system that's taken 72 billion pound out the system and then pay them again for walking away when the Investments needed to put it right they've taken them on it and through regulation and government they should be made to put it right now if they decide to walk away then that's for them but we should not be paying them twice okay so you made it clear you're not good you heard it here first on Cross question Jim McMahon is saying it will not pay twice under labor government not going to nationalize the shareholders will be made to put it right

Channel: LBC

Views: 207,280

Keywords: lbc, lbc live, watch lbc, interview, interviews, politics news, british politics, uk politics live, live debate, debate, Brexit, James O’Brien, Iain Dale, Nick Ferrari, Johnson, Sunak, Andrew Marr, Marr, O'Brien, News Agents, uk politics, shelagh fogarty, tom swarbrick, lewis goodall, andrew castle, sangita myska, rishi sunak, david lammy, natasha devon, parliament, economy, analysis, debates, commentary, updates, thames water, water, debt

Id: VrZzn4k4oFc

Length: 8min 46sec (526 seconds)

Published: Thu Jun 29 2023