What Is Going On With The Water Companies?



In the UK we have a fairly unique situation, in that all of the water suppliers, the water companies are all privatised they are all public limited companies, traded on the stockmarket, sold to investors.


Absolutely nothing unusual with that, in that we know that these businesses are run and managed for a profit, but we also understand that all companies that are managed for a profit tend to operate a lot more efficiently than those that are publicly owned. I fully appreciate that that’s a bit of a generalisation but hey that’s where I am today.


The business that manages water supplies across the middle of the country United Utilities has this week announced a dividend payment to its shareholders of £140m or so.  Nothing wrong with that, it’s what you’d expect a public limited company to do, it returns money to its shareholders as a dividend in return for them investing in shares.


You could of course argue that the £140 million pounds would be better spent on making sure their water pipes are not leaking or returning it back to the state to be used for other worthwhile causes of which there are many.


That’s not an argument I want to enter into here.


What I do want to say is this, the situation with all of the water companies in the UK is pretty dire,  many of them have unacceptable levels of leaky pipes which means large chunks of the supply are left to drain back into the Earth and little ends up back in reservoirs and the pipes use supply to British businesses and households.


The water reserves that this country has are finite, we used to think we could never run out of water given the amount of rain we normally have. But if a water company it’s not managing its resources by dealing with its leaks then at some point it has no choice but to withhold supplies because it simply doesn’t have sufficient. It takes a few weeks of sunshine and the reserves look very insufficient.  Bit like where we are now – July 2018.


It also seems odd that a  business that makes a profit by supplying a product still gets paid when it is not supplying that product which is the case with the water companies. It’s called a standing charge.


Importantly there is evidence that some of the major water companies in the UK have been draining water from rivers and watercourses which causes problems for wildlife and for which they bear no responsibility. Of course, they argue that they do have a responsibility to the environment and indeed they manage it .


Big problem is what are we do about it?


Many of these water firms are foreign-owned and some don’t pay any or little tax in the UK. Most are not accountable to the public, sure they have a regulator which kinds of produces documents and make statements but the reality is the regulator does little to ensure that the practices of these water companies fit with the modern environmental needs, nor can the regulator make them pay tax.


We should expect a water company to be mindful of its leaks and mindful of  it’s duty of care to our environment, to not draw water from natural water courses like rivers and streams and to be responsible for dealing with its leaks sure we know it’s expensive but being in business is never cheap.  If they want to continue charging us for supplying water they need to be responsible for making sure that that water is supplied in the right way.


As a nation and as a species we are facing more and more problems with the environment and making sure the water companies take responsibility for their actions will be a start for the environment to be better looked after than it has.


You cannot keep taking from the environment and expect it not to fail at some point in time of course it fails very slowly which is why we are only just starting to notice it now.


Global warming drying up watercourses, all of these are problems which are not going to get better on their own, sure we may have some inclement weather or rain storms in the coming years but the bigger picture is that where we live is becoming drier.


The water companies like United Utilities have a big part to play in making sure that we secure suppliers for the long term. It is also important, that we make sure that if a company’s profits are derived in the United Kingdom then that company pays tax in the United Kingdom, the whole issue of offshoring profits and borrowing money against security from the Capital markets in order to pay dividends therefore  raping the company of its assets should also be banned. It’s either that or we need to we privatise all of the utility companies in the UK starting with water.


I don’t think it’s complicated, I know it’s shocking and most people don’t want to consider it because it seems to be a socialist move. But the reality is if we don’t start looking after this environment of ours we are going to have bigger problems to contend with in the very near-term future.


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