Former Shadow Chancellor confirms water and energy privatisation are riddled with corruption

John McDonnell: he knows exactly what’s been going on in the water companies since privatisation.

It’s always welcome when a senior politician confirms one’s suspicions.

In an article yesterday (May 20, 2023), This Writer suggested that greed has overtaken service provision in the boardrooms of both the privatised water and energy firms.

Now we discover that former Shadow Chancellor John McDonnell has reached much the same conclusion.

In an article published by the Yorkshire Post, he stated:

The water industry is second only to the energy industry in ripping off the British public. Since privatisation, the water companies have stolen from the average consumer of water in this country.

He added some details to the story of water privatisation, too:

Privatisation was meant to reduce prices, increase investment and make the industry more accountable to the wider public through shareholding. That has not been the case.

Those of you who have been following this issue on Vox Political will know I’ve stated that privatisation was meant to reduce prices and increase investment.

As for making the industry accountable to the wider public through shareholding, I’m not sure how that is supposed to be better than nationalisation, which makes the industry accountable to us all, rather than the comparatively few people who own company shares.

In any case,

It is not more accountable through shareholding, because most of the companies that now own British water are owned by overseas shareholders.

That’s overseas shareholders who own most of the British water companies, and not pension funds – as some apologists for privatisation have tried to claim.

And what has happened?

Since 1989, real water bills have risen 50 per cent. Since 2010, bills have gone up by more than 12.5 per cent. At the same time, individual family incomes have gone down by five per cent.

This is interesting:

Significant investment has been made in the infrastructure, but the problem is that since the 1990s that has declined as a proportion of the overall turnover of the industry.

How strange. Significant investment, yet the system leaks like a sieve. One hesitates to image what it would be like without this ever-decreasing contribution.

Most of the money we’ve paid the water firms, on the other hand,

has gone into paying interest charges on water company debts or dividends to their owners and shareholders.

It has now been exposed that some of the borrowing is being used to pay dividends to shareholders and high salaries to chief executives and board directors.

Six UK water companies took high-interest loans from their owners through the Channel Islands and then converted them into euro bonds. They then lent them back to the companies and paid virtually no tax on them whatsoever.

This is a tax scam for which these water companies are used as a vehicle… This is a scandal.

Mr McDonnell recommends, rather than privatisation, a shift to the not-for-profit company model exemplified by Welsh Water.

It’s nice to know that This Writer’s local water company is considered the way of the future by at least one influential politician – but I still think re-nationalisation is best; it eliminates the risk of corruption altogether (or, at least, should).

But what’s to be done about the scandal(s) that Mr McDonnell has identified?

Under the current government – nothing, most likely.

So we need a better government.

If more young people were encouraged to vote, we might actually get it. And it is in their best interest.

After all, it’s the young who’ll suffer the most over the long term if rampant water corruption and profiteering isn’t halted – not to mention the sewage scandal.

Source: John McDonnell: Our money seeps away into profiteering by water firms | Yorkshire Post

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1 thought on “Former Shadow Chancellor confirms water and energy privatisation are riddled with corruption

  1. Grey Swans

    The young do not even keep themselves registered to vote.

    It is the Grey Vote who are also suffering now from high water bills, alongside the profiteering from the energy companies.

    The Grey Vote are offered nothing policy-wise, by any unelected Left party.

    The only potential Left party that could gain the vital Grey Vote, is the Over 50s & Young Labouring Ages party (brand), which needs volunteers, please, to bring the new party into existence, and so get the policies for all ages, including renationalising all public services, at no cost to the taxpayer. Contact through website please to volunteer.

    Help it come into existence by donating, please, what you can to below crowdfunder—full-manifesto

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