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Thames Water

Mick P said:
I am sorry but if you apply pure logic, the electricity privatisation programme was a success.
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You have provided two evidenced arguments for success:
  • electricity prices are lower than immediately pre-privatisation
  • anecdotal evidence that people who worked for the Big Six think we are getting a better deal than before. (Really, is this the best evidence you've got? Anecdote?)
I accept your invitation to apply pure logic: does the weight of evidence fall on your side or mine?
  • prices have reverted to mean (prices are about average internationally - hardly evidence of conspicuous success)
  • profit margins have been allowed to quadruple to 4% from 1%
  • Switching costs have been forced on us as consumers (rather than citizens), creating an estimated £1.4bn penalty for customers who don't switch tariffs each year (BBC), unnecessary work for those who do, and additional admin costs for the companies
  • double digit billions in dividends have been paid out to shareholders by energy providers
  • companies have taken on debt, paying double digit billions in interest, contributing to low effective tax rates (further depriving the public treasury)
  • The distribution network operators also make ca. £6bn per year in profits
  • 80% of all current and pending UK offshore wind capacity is foreign-owned
  • 42.2% of the UK’s current and pending offshore wind capacity is in foreign public ownership in some form
  • we are effectively subsidising competing states (France, Spain, Germany, Qatar) and investment groups (Blackrock, etc)
  • In a high-profile failure, Bulb Energy was bailed out (cost up to £6.5bn - BBC)
  • Another 30 firms went bust in 2021. The government was supplier of last resort - cost unknown, but in the billions.
  • A £40bn liquidity facility was set up by the government in 2022 to provide 'last resort' loans to struggling firms (FT). This is further evidence of failure: if private companies ultimately need government support then they are better described as government-subsidised rather than private.
  • The government is part-nationalising the National Grid, because it needs to make £60bn strategic investments that the private sector won't make (Guardian)
  • No new nuclear has been built
  • We are short on gas storage. Rough was closed in 2017 and partly re-opened in 2022. It's likely government paid toward its re-opening (BBC).
  • billing abuse has taken place (Sky News)
  • pre-payment meter scandals have included breaking into customers' homes (Guardian)
  • Mis-selling scandals have proliferated
I'm sorry but - how can I break this to you gently? - this is not what success looks like.
 
Mick P said:
What happened in the early day was that large companies forced prices down which was what I done and the domestic user didn't understand the system and just stayed with the same company so prices only inched down. The 30% was an across the board price with private companies getting bigger reductions than the domestic customers.
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So are you saying that it was a success for large companies, but not for domestic users? Unless they understood the system and took advantage of it? Why should the domestic customer have to study the system to get a fair price?
 
awkwardbydesign said:
So are you saying that it was a success for large companies, but not for domestic users? Unless they understood the system and took advantage of it? Why should the domestic customer have to study the system to get a fair price?
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Large companies paid people like me to negotiate electric supply contracts on their behalf. Thus low prices could be expected. This would be done every 12/18 months.

Domestic users change their suppliers every now and then. They can, if they are determined enough, renew every month.
 
Mick P said:
Large companies paid people like me to negotiate electric supply contracts on their behalf. Thus low prices could be expected. This would be done every 12/18 months.

Domestic users change their suppliers every now and then. They can, if they are determined enough, renew every month.
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There are many other measures of success for utilities, other than how much the end user pays, not least predicting, planning for and building future capacity, maintaining the current estate and managing demand. All of which privatised utility companies have manifestly failed at as they are completely open to exploitation by shareholders.
 
foxwelljsly said:
There are many other measures of success for utilities, other than how much the end user pays, not least predicting, planning for and building future capacity, maintaining the current estate and managing demand. All of which privatised utility companies have manifestly failed at as they are completely open to exploitation by shareholders.
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It seems to me more and more that the idea of running something in a market is based on quite a purist set of arguments that were deployed by economic theorists two or three hundred years ago, in very different circumstances. It probably still applies in some contexts, but is crucially dependent on transparency to the consumer, and equally crucially not on delivering "value to shareholders"; a dynamic which has probably done more to undermine capitalism over the past century than almost anything else, and which didn't really exist three hundred years ago.
 
foxwelljsly said:
I don’t care who owns the shares, Thames Water should be allowed to fail before it is renationalised with zero compensation for shareholders. They are accountable for all the failings of Thames Water and should not be compensated a penny further.
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This, I'm afraid.
 
laughingboy said:
You have provided two evidenced arguments for success:
  • electricity prices are lower than immediately pre-privatisation
  • anecdotal evidence that people who worked for the Big Six think we are getting a better deal than before. (Really, is this the best evidence you've got? Anecdote?)
I accept your invitation to apply pure logic: does the weight of evidence fall on your side or mine?
  • prices have reverted to mean (prices are about average internationally - hardly evidence of conspicuous success)
  • profit margins have been allowed to quadruple to 4% from 1%
  • Switching costs have been forced on us as consumers (rather than citizens), creating an estimated £1.4bn penalty for customers who don't switch tariffs each year (BBC), unnecessary work for those who do, and additional admin costs for the companies
  • double digit billions in dividends have been paid out to shareholders by energy providers
  • companies have taken on debt, paying double digit billions in interest, contributing to low effective tax rates (further depriving the public treasury)
  • The distribution network operators also make ca. £6bn per year in profits
  • 80% of all current and pending UK offshore wind capacity is foreign-owned
  • 42.2% of the UK’s current and pending offshore wind capacity is in foreign public ownership in some form
  • we are effectively subsidising competing states (France, Spain, Germany, Qatar) and investment groups (Blackrock, etc)
  • In a high-profile failure, Bulb Energy was bailed out (cost up to £6.5bn - BBC)
  • Another 30 firms went bust in 2021. The government was supplier of last resort - cost unknown, but in the billions.
  • A £40bn liquidity facility was set up by the government in 2022 to provide 'last resort' loans to struggling firms (FT). This is further evidence of failure: if private companies ultimately need government support then they are better described as government-subsidised rather than private.
  • The government is part-nationalising the National Grid, because it needs to make £60bn strategic investments that the private sector won't make (Guardian)
  • No new nuclear has been built
  • We are short on gas storage. Rough was closed in 2017 and partly re-opened in 2022. It's likely government paid toward its re-opening (BBC).
  • billing abuse has taken place (Sky News)
  • pre-payment meter scandals have included breaking into customers' homes (Guardian)
  • Mis-selling scandals have proliferated
I'm sorry but - how can I break this to you gently? - this is not what success looks like
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What does success look like?
 
Kirk said:
What does success look like?
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I think that question is better directed at the people who decided privatisation was a Good Thing, back in the day. I'm sure they will have had an outcome in mind, evidence-based decision making being quite the thing nowadays.
 
laughingboy said:
Kirk, your usual style is to sealion, that is to ask questions in bad faith. You are doing it again here; demanding that I set out a philosophical position while remaining silent on yours.

If you want a discussion, I'm going to insist that you go first. What do you think success looks like?
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Thought you might jump to an assumption but I did not predict the rest - quite a lot going on there...

There's nothing behind my post other than the question I posed. If you don't want to answer it, that's cool. And to answer yours, I don't know, hence my question.
 
Sue Pertwee-Tyr said:
I think that question is better directed at the people who decided privatisation was a Good Thing, back in the day. I'm sure they will have had an outcome in mind, evidence-based decision making being quite the thing nowadays.
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I guess it depends on the industry and the quality of regulation (and the government behind the regulators).
 
Kirk said:
Thought you might jump to an assumption but I did not predict the rest - quite a lot going on there...

There's nothing behind my post other than the question I posed. If you don't want to answer it, that's cool. And to answer yours, I don't know, hence my question.
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Kirk, you tick all the sealioning boxes. From wikipedia:
Sealioning... is a type of trolling or harassment that consists of pursuing people with relentless requests ... while maintaining a pretense of civility and sincerity ("I'm just trying to have a debate"), and feigning ignorance of the subject matter.
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or, more fully:
Rhetorically, sealioning fuses persistent questioning—often about basic information, information easily found elsewhere, or unrelated or tangential points—with a loudly-insisted-upon commitment to reasonable debate. It disguises itself as a sincere attempt to learn and communicate. Sealioning thus works both to exhaust a target's patience, attention, and communicative effort, and to portray the target as unreasonable.
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Kirk said:
Re: my two posts, the evidence doesn't stack up
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In response to my accusation of sealioning, your responses were textbook:

'disguises itself as a sincere attempt to learn and communicate'

'...portray(s) the target as unreasonable'.

It's nailed on, Kirk.
 
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