Reply to post: Re: Paranoid, moi?

Labour: Free British broadband for country if we win general election

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Re: Paranoid, moi?

I work in the water industry. And the reason it was privatised wasn't ideology. It was because we were in the EU. Basically with the British government in charge of both regulation and investment, they weren't going to pass laws to clean up the beaches that would then mean they had to spend money that they didn't have on water treatment.

But once that got agreed at EU level, there was no way out of it. So it was either raise taxes or borrow more money. It's been one of the better privatisations too. In that water bills haven't shot up, and lots of money got invested in boring sewage treatment. But also we got a nice regulator, who only let the companies put prices up, if they commit cash to the various investment periods on upgrading the system.

So you could nationalise it again. I think that's silly, but it's possible, they're profitable companies and they have to be treated as public utilities anyway - so they're always going to be highly regulated. Even now they can't cut people's water off if they don't pay their bills for example. . But once you do that, prices won't change much - because they're still going to have to keep doing loads of investment to fix the infrastructure that was so poorly invested in after WWII. But if government is feeling poor, they will stilla have the same struggles to find that investment - with the cries of "fund our schools 'n' hospitals" ringing in their ears.

This also leads to worse regulation, as a department that can't get an increase in funding through the Treasury is unlikely to propose tougher regulation. Which is why the current system is actually the sweet spot (in my opinion obviously), because government now have the incentive to do their job and regulate properly - and the private companies then have to raise the funding to comply with that, or they get fined and not allowed to raise their prices. If government takes it back over, it's going to be hungry for cash to pay for all its social programs, so bills won't drop (I bet they go up faster - it's such an easy stealth tax) - and then future regulation will be hostage to the financial position of government.

And that's before I make the more party-political point that a Chancellor who's publicly admitted to being a Marxist is unlikely to manage the economy well - and so leave his government flush with cash for investment...

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