Zero points, shit in rivers, and weeping at Margaret's grave

I got an uncanny feeling of déjà vu when watching the recent Channel 4 drama about water company pollution, Dirty Business

A teacher, Reuben, gets an infection when surfing in sewage encrusted waters. Periodic attacks involving writhing on the floor and vomiting mean he has to give up his job. He applies for disability benefits but gets zero points because, as the assessor keeps repeating, when he is not having an attack, he functions normally (3^rd episode, 20.43).

You can see the tired resignation creep across Reuben’s face, as he realises that the fact he does have regular attacks which make him unemployable is completely irrelevant to the assessment.

This is so evocative of the hundreds of thousands of sick and disabled people deemed fit for work points in the roll-out of the Work Capability Assessment under the Con-Lib Dem coalition. They got zero points too because although they couldn’t do any job that existed in the real world, by reaching above their head or into their top pocket once, they revealed that they could do an entirely abstract form of work.

At the time, there were futile calls for a real-world test to take account of what jobs actually demanded people could do repeatedly (as jobs tend to). But these were slammed down by the government in the shape of employment minister Chris Grayling who declared himself “absolutely, unreservedly and implacably” opposed to such a real-world test.

Current Labour DWP enforcer Pat McFadden doesn’t need to signal his opposition to a real-world test – it’s taken as read that it’s a total non-starter. The unbending focus now is on reducing the numbers of people qualifying for Personal Independence Payments (PIP) (which is what the teacher in Dirty Business applies for) despite the fact that 300,000 claims a year are rejected.

Labour did want to make the PIP criteria much tougher, something even Iain Duncan Smith found too much to stomach, but plans were put on hold as a result of an unexpected rebellion of backbench drones. But they will undoubtedly be repackaged as a result of the Timms Review now out for consultation.

Nothing better illustrates the duopoly afflicting the allegedly adversarial British political system than the treatment of sick and disabled people. The default consensus that they are ‘taking the mickey’ and deserve to be punished for having the temerity to have something wrong with them, which is probably half in the mind anyway.

The attitude, as John Pring shows in The Department, can be traced back to the dog days of the Thatcher administration, when health minister and “Mr Privatisation” John Moore wrote to chief secretary to the Treasury John Major, saying rising spending on sickness benefits needed to be tackled, with ‘no choice’ but to make ‘long-term savings’.

In the old system, i.e. invalidity benefit which existed before the testing regime began in the early ’90s, the ‘overriding consideration’ had been one of reasonableness, with the claimants’ ability to work measured against jobs which existed in the real world.  But that is a bygone era in British history. Hence the assessor’s monolithic insistence that when the ex-teacher in Dirty Business was not having a debilitating attack, he was perfectly able to do a job. The fact that vanishingly few employers would want to employ someone who involuntarily squirmed around on the floor every week, being sick everywhere, is not the state’s problem.

Have a nice day.

As of the beginning of this month, new claimants in the Limited Capacity for Work Related Activity Group of the Health element of Universal Credit (formerly Employment and Support Allowance) will have to survive on £50 a week, a nearly 50% cut from the £97 they previously received. This is so the ‘perverse incentive’ to apply for sickness benefit is removed. Actually, there is now a ‘perverse incentive’ to say there is nothing wrong with you even though there is, to ensure against the possibility that you will be judged unfit for work and placed in the LCRWA group.

This, in case you needed any reminder, is being carried through by a ‘Labour’ government. I remember being told in 2020 – by some young careerist working his way up the greasy pole at a meeting to choose the Labour leadership candidate which the CLP I was in would support – to “think of the most vulnerable person” I knew and then cast my vote for Sir Kier Starmer.

What he forgot to say was that if I harboured some sadistic desire to make them suffer even more, I should vote for Starmer.

As Dirty Business makes clear, there is a unity of purpose between the ‘Labour’ party and the Conservatives, which was briefly under threat in the four years before 2020 (which now resemble some strange hallucination). And the wretched consensus is not merely about how to treat the chronically ill.

As the programme recalls, David Cameron promised to tear up 3,000 pieces of needless regulation in order, he claimed, to release the growth potential of the British economy. Over a decade later, Starmer wrote to all 17 regulators in the UK telling them to relax rules for companies. This has resulted in a steep decline in enforcement actions, as they obediently scrabble to fall into line with the government’s so-called growth agenda.

And where has this deregulatory mania got us (aside from turds in rivers that is)? In the 18 years after the Financial Crisis of 2008, the economy has grown by 22% (an average rate of under 1%), while in the 18 years prior to 2008 it grew by 53% – more than twice as fast (and that record was terrible compared to the social democratic post-war years). But do carry on, won’t you.

We are in the grip of necrophile Thatcherism and it’s killing us. Some more than others, admittedly.

And You're Working for No-one but Us

 “And you’re working for no-one but me” is George Harrison’s sign off to the first song on one of the greatest British albums of all time, the Beatles’ Revolver. But compared to what follows it has always struck me as rather a damp squib – lyrically one extended whinge about how Surrey mansion dwellers pay too much in tax. I suppose to be fair to the author, Harrison was very anti-war and he objected to unwillingly paying millions in tax – at the time the top rate stood at 92.6% – so governments could bomb people.

Nonetheless it is quite sad that of all the sentiments the Beatles expressed, “in the end” it was those of Taxman that had the greatest longevity. You need a lot than love, and giving war a chance now seems to be the spirit of the age (alright that was Lennon). But thanks to Margaret Thatcher, Ronald Reagan, and the sprouting up of numerous tax havens around the world successful pop stars need no longer fret about governments getting their paws on their money.

But from the perspective of nearly sixty years, to sing “you’re working for no-one but me” with reference to His Majesty’s tax collectors seems faintly ridiculous. We’re definitely working for someone but there are people much further up the queue than HMRC. Perhaps their silhouettes need more light shone on them:

Landlords and Banks

The first thing we all need is somewhere to live. After rising above inflation for years, rents increased by 9% in 2024, the highest surge on record. The average rent now consumes over a third of renters’ income and more than half of it in London.

Though there are only 11 and half million renters in the UK, their numbers are inexorably rising. But they are still below the so-called “owner occupiers”. Except in many cases, while they occupy, they don’t own anything. The ‘owners’ are paying off a debt (which everyone calls a mortgage to avoid calling it a debt) to the actual owner of their property, usually a bank. And since interest rates have ballooned in the last few years – in the context of house prices inflating by 1,000% since the early 1980s – that debt has become much more expensive.

Banks, by the way, are sharing the pain by making record profits – HSBC amassed £24 billion in 2023, an 80% increase. This windfall results from the interest they receive on mortgage payments and loans being so much higher than the interest they pay on their savings accounts. Why this discrepancy should exist is a bit of a mystery. Theoretically, the two should cancel each other out and banks should not be laughing all the way to the bank because interest rates have been hiked. Maybe Sir Kier – who gave HSBC’s chief executive a knighthood in December – can enlighten us.

It’s good to know the people your monthly labours are paying off are having a hard time too.

Utility companies

Next on the identity parade are water and energy companies. In the past, these two public services were nationalized. But in our post-Thatcherite wasteland, sorry landscape, they are the play things of private equity firms who load the owners with debt and expect their captive customers – us in other words – to pay for the privilege of being compelled to use them. I just love the free market.

And when, as with Bulb Energy, these wealth destroyers experience liquidity problems, they can rely on the taxpayer, in the form of the government, to bail them out. Not that we have any say in the matter.

When the direct debits kick in every month, a lot of the damage to your balance is down to these two suspects. Energy bills are about 50% higher than they were pre-Covid. As with rent and mortgage payments, only in a semantic sense is this not taxation. Unless you want to live in a cave somewhere, or on the streets, you need a home and you need heating and water. Contrary to American monetarist proselytiser, Milton Friedman, we are not “free to choose”.

And it’s going to get worse. The average water bill will increase by 36% over the few years.

“If you get too cold, I’ll tax the heat,” Harrison sang in 1966. He meant, “I’ll raise the energy price cap”.

Corporations and things like eating

In common with all living beings, human beings need to consume if they want to continue living. But the cost of consumption keeps going up. If consumer inflation has fallen from its highs of a couple of years ago, that doesn’t mean prices will return to their former levels, just that they will continue to rise at a slower rate (although inflation seems going up again now anyway).

But the ever-increasing cost of essential goods is not solely due to ‘impersonal’ factors like the cost of raw materials. It is also down to the power of the huge corporations that dominate the market to increase costs above the ‘natural’ rate of inflation. For example, in the UK, “price mark ups” – price increases above the production costs to produce profit – rose from 58% in 2002 to 82% in 2020. The profits of the 350 largest companies on the London Stock Exchange have swollen by 73% since 2019.

This price gouging is symbolised by internet providers typically hiking raising annual broadband fees – now essential for doing most things in life, including work – by CPI (inflation) plus 3.9%. Why? Because they can.

What is now hitting home is that, contrary to the advertising, the Thatcherite revolution did not enthrone the consumer as king. Everyone knew that workers would have to suck it up, but the customer was felicitated. But that’s not how things have turned out. All regulators have a duty to protect the consumer but, as evidenced by the failure to compel banks to pay interest on savings in line with hikes in interest rates, this is just honoured in the breach. And with Reeves’s drive for deregulation, such a responsibility is going to become even more threadbare.

 You have to crane your neck to see the real beneficiaries.

Only in the perverse universe we now inhabit, could a privately educated ex-stockbroker who claims to be “keeping the flame of Thatcherism alive” and controls a company masquerading as a political party be the one to take advantage of this situation.

It’s enough to make you gently weep.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drag Me to Hell – Why are we so right-wing?

 

Margaret Thatcher is known for many things – declaring war on trade unions, initiating the mass privatisation of publicly-owned utilities, selling off council houses, deregulating the City of London, cutting taxes on the rich, to name a few. But one thing she is not famous for is being on the Left.

Nonetheless, in 1982, she did something which, in today’s climate, would be seen as left-wing, even ‘far left’. She suspended arms sales to Israel. This was in response to the Israeli invasion of Lebanon, which was prompted by the fact that the Palestinian Liberation Organisation had relocated there.

Many civilians were killed and Thatcher’s government took immediate action. An invitation to Israel to attend the British Army Equipment Exhibition was withdrawn and arms sales were stopped. One Foreign Office memo stated, “It would be odd if we were now to conduct bilateral business with the Israelis as though nothing had happened”.

Contrast this with the current British government’s reaction to the genocidal Israeli attack on Gaza, which has already killed far more civilians than the Lebanon War did. In fact, the official number of dead – 30,000 – will be swelled by so far unreported deaths – those dying at home and missing because they are buried under rubble.

Atrocities definitely happened in the 1982 war, most famously in refugee camp massacres. But, as far as I’m aware, deaths from malnutrition did not occur, as they are now. Nor were starving people deliberately massacred by the Israel Defense Force.

Nonetheless, this time Britain is definitely conducting business as though nothing had happened. Arms sales continue, and indeed the “defense relationship” and “growing Israel-UK partnership” is celebrated by the IDF.

Virtually the only person in the UK Parliament to object to this state of affairs is a propagator of ‘far left’ ‘socialism’ who has been cast into out darkness on the patently ridiculous grounds that he enabled antisemitism to flourish when he was leader of the Labour party.

I doubt somehow though that Thatcher is turning in her grave.  She regarded her greatest victory as compelling the Labour party to renounce its mixed economy, social democratic ideology in favour of her right-wing, corporate friendly, anti-worker economic world-view. Something Corbyn, all too briefly, reversed.

The Ultimate Compliment

Present leader Sir Keir Starmer is the perfect compliment to Thatcher’s legacy.  Despite being elected on a promise of upholding Corbyn’s economic policy, he has jettisoned every element of it, leaving a husk of Thatcherite nostrums impeccably attuned to the political and economic establishment which has grown to such dominance in her wake.

For example, in throwing overboard a pledge to spend £28 billion a year on green energy projects, Starmer and de facto deputy Rachel Reeves consciously aped the language of the Cameron-Osborne government employed to justify austerity. They accused the government of “maxing out on the nation’s credit card”. The same mind-numbing phrase cropped up in Starmer’s response to the Budget.

Reeves has, in redoubtably conservative fashion, promised to balance the nation’s books, despite, somewhat hilariously, having her own Parliamentary credit card taken away in 2015 for over-spending on expenses.  She has also promised not to reintroduce a cap on bankers’ bonuses abolished by the Conservatives, as this would mar the charm offensive with the City of London that she and Starmer have methodically deployed over the last few years.

A Different Country

The question that should then be asked is how did British politics get so sclerotically right-wing, especially when, in terms of social attitudes, the diametrically opposite trend has occurred?

Last autumn, for example, the researchers behind British Social Attitudes Survey (BSA) proclaimed that Britain had undergone “a near revolution” in terms of social attitudes over the last four decades:

One clear theme emerges. On many social issues, such as sexual relations or whether women with young children should go out to work, there has been a long-run secular change trend towards a more liberal climate of opinion. In what might be thought a near-revolution in the country’s cultural outlook and social norms, Britain has increasingly come to believe that what people do in the bedroom, what kinds of family they live in, and how they combine family life and paid work should be up to them. The job of government is to respect and facilitate the decisions they make rather than try and take those decision[s] for them. 

In 1983, half of all respondents said that same sex relationships were “always wrong” compared to just 9% two years ago. Over three quarters of people support a woman’s right to have an abortion, compared to just 37% 40 years ago.

Other seismic changes can be found in attitudes toward premarital sex, having children outside wedlock, and gender roles in the workplace and the home. In 1987, for example, 48% agreed that ‘a man’s job is to earn money, a woman’s job is to look after the home and family’. Now only 9% of people do.  Britain “now looks and feels like a different country from 40 years ago”, the BSA says.

These are all welcome changes but in terms of politics, and the attitudes underpinning it, Britain doesn’t “feel like a different country from 40 years ago”. It feels like a worse country.

To go back to the example that introduced this article, in 1982 – when dinosaurian attitudes on social issues held sway – Margaret Thatcher could, with minimal opposition it seems, suspend arms sales to Israel. It is inconceivable that such a policy would be enacted today and if, by some miracle it was, it would be instantly accompanied by howls of antisemitism. 

It may justifiably be pointed out that these changes in social attitudes did not just happen. According to journalist Ian Sinclair, reporting on the BSA survey curiously neglected mentioning the role of “groups like the Women’s Liberation Movement, Stonewall, the Gay Liberation Front and Outrage dealing with violence, threats and abuse in their struggle to win equal rights, changes in the law and shift public opinion.”

But there is no shortage of activist groups – on anti-austerity, public ownership, the rights of disabled claimants, inequality, and corporate taxation for example – trying to shift Britain’s economic policy and politics marginally to the Left. But in this case, barring minor victories on things like the municipalisation of bus services, they have just been banging their heads against a brick wall.

Why is this? Why did activists, admittedly after years of struggle, succeed in prising the door open on gender issues, gay rights, and sexual choice but in terms of politics and economics meet a defiant ‘No Pasaran!” from the elite?

1983 will never die!

I can’t give a definitive answer but one notable feature of British politics over the past four decades has been an innate conservatism in the worst sense of the word. Instead of taking on vested interests, it has opted to protect and preserve them.

In party political terms, we have one side fixated on a perpetual emulation of Thatcher’s epoch-changing 1983 victory facing off against the 1997 Reenactment Society. Rather than changing, as social attitudes obviously have, politics is frozen in aspic, like some endless rerun of Yes Minister (which for those who don’t know was a ‘comedic’ representation of the right-wing Public Choice Theory and obsessed with cutting government waste).

In 2008, our necrophile political system bailed out, with public money, a financial system that had imploded entirely due to its own inner workings. Not only was this an enormous transfer of wealth from poor to rich, it also rescued and further entrenched a sector of the economy that feeds off debt and thus loves conservative economics.  

Finance wants austerity because, as a result, wages are held down and people become even more susceptible to getting into debt and having to make interest payments. For the same reason, it has an aversion to trade unions. Finance is also a prime mover behind the privatisation of public assets, funding the Private Equity groups that often take over public services, like water or health, thus benefitting from the rising user fees that people are compelled to pay to gain access to basic services.

If ‘market failures’ exist and they aren’t being dealt with, you can bet that for some people, invariably extremely well-off, these aren’t failures at all but successes and the source of their wealth.

Hysterical Billionaires

And when the billionaires who run Britain’s mass media organisations ran into some turbulence after revelations of phone hacking, the obedient political class was on hold to limit the fall out. The initial enquiry into unlawful conduct by the newspapers, led by the judge Brian Leveson, was meant to be followed by a second part (‘Leveson 2’) that would have looked into “corporate governance issues”. But this was scrapped by Matt Hancock because of the “significant progress” that had apparently been made.

As a result, rather than clipping their wings, moguls like Rupert Murdoch were emboldened. His News UK launched the right-wing Talk TV station in 2022, emulating the hysterical Fox News in the US despite laws against broadcasting bias in the UK which didn’t seem to make much difference. The fact that Talk TV is soon to become a streaming only service does not denude from its intention to further lock British politics into a right-wing direction.

Its ‘rival’ GB News plays a similar role. The co-owner of the channel is hedge fund billionaire Sir Paul Marshall. In a previous incarnation he funded and edited the 2004 ‘Orange Book’, a collection of free market espousing essays by leading Liberal Democrats which set the tone for their role in the Cameron coalition after 2010.

Marshall, who has been outed for seeming endorsement of far right conspiracy theories, has previously lamented the fact that financiers like him ‘made out like bandits’ as a result of the government’s decade-long Quantitative Easing programme. But despite this honesty, he hasn’t been deterred from putting the money to effective use.

If you create a large coterie of billionaires, as our political system has, you shouldn’t be surprised when they use that enormous wealth to mould public opinion and protect their interests. 

Liberal and progressive opinion in this country has been profoundly shaped by the Whig theory of history, which is convinced that the British story exhibits a steady, if slow, progress towards more liberty and rights. However, the experience of the last 40 years does not bear this out. Progress and reaction can co-exist, each in their own separate sphere of influence. Reality, as opposed to the idealised narrative that exists in our heads, is frequently messy and may point in two contradictory directions at the same time.

 

 

Money, money everywhere and not a drop to drink

Water, wealth uncreation and turning the means of life into financial assets

The scandal of Thames Water – £14 billion in debt and seemingly incapable of fixing leaks or avoiding untreated sewage being pumped into rivers – says so much about our allegedly democratic political system.

The Conservatives, naturally, want renationalisation – should it become unavoidable – to be a strictly temporary stop-gap before, as with insolvent banks after the 2008 crisis, water is returned to the good hands of the private sector.

But the other team, Labour, are also against permanent nationalisation. In fact, together with the water industry, they are racking their brains to come up with plausible alternatives to it.

Such an absurd situation, at a time when large pluralities of voters, including Conservative ones, want the water ‘industry’ to be taken back into public hands, is perhaps more understandable in the light of the last New Labour government’s intimate ties to the water companies.

Ruth Kelly, for example, former cabinet minister under both Blair and Brown, is head of Water UK, the trade association for the water companies and naturally regards nationalisation as anathema. Angela Smith, former Labour MP and one of the founders of (Don’t) Change UK, vehemently opposed Labour’s previous policy, under Corbyn, of renationalising water. She was quietly readmitted to the Labour party last year. Ian Pearson, former New Labour environment minister is a non-exec director of Thames Water, the UK’s biggest water company, which also employed the ex-Labour cabinet minister and one time Trotskyist, Gus Macdonald, as its  European advisor between 2006 and 2016.

Such an elite consensus is symptomatic of the British oligarchy which masquerades, less and less convincingly with every month that goes by, as a model democracy. The Conservatives are obviously in favour of the continuation of privately-run water – it was Thatcher who privatised it in 1989. But the opposition Labour party is so well ensconced in the (fraying) order of things, that it is just as ideologically opposed to a change in the status quo. Notwithstanding obvious errors like the Brexit referendum, which released so many exorcised ghosts from the closet, British ‘democracy’ is about persuading the public to acquiesce in a state of affairs they dislike more and more as time passes.

But if the water ‘industry’ illustrates the hollowness of democratic decision-making, it also exposes something fundamentally rotten in the way we approach our economy as a whole. The water companies are, it has been reported, collectively in debt to the tune of £65 billion, up from nothing when they were privatised. “The staggering combined debt pile built up by the UK’s 12 water companies means that huge swathes of cash are being spent on interest payments,” fumed the Daily Mail a few weeks’ ago, “money that could be spent cleaning up polluted rivers or fixing leaky pipes.”

But no-one seems to ask why they are in debt. It can’t have been to fund infrastructure investment as the sewage-tainted rivers and seas and unplugged leaks wouldn’t exist if the infrastructure was properly maintained, let alone upgraded. The real reason is both more prosaic and depressing. Deliberately placing companies in debt, in order to extract money from them, is a core part of the strategy of their immensely wealthy owners.

The technical term for this is a ‘leveraged buyout’. The idea goes back to the 1960s but really only took off in the 1980s and ’90s. One American writer on “asset-manager capitalism” describes it thus:

[Traders realized] they could buy a company with borrowed money, using the company’s assets as collateral for the loan. They then transferred the debt to the company, which in effect had to pay for its own hijacking, and eventually sold it for a tidy profit.

The root of Thames Water’s debt affliction stems from the time it was bought by Australian asset manager Macquarie in exactly such a leveraged buyout in 2006. According to Money Week magazine, “by the time it was sold again in 2017 its debt had ballooned from £3.4bn to £10.8bn”.

Incidentally, Macquarie’s interest in the UK’s Water ‘industry’ has not abated. In 2021 it completed a “debt investment” in Anglian Water and acquired a majority stake in Southern Water.

According to American economist Michael Hudson, asset managers and ‘activist shareholders’ now look upon companies generally as “cash cows”. Rather than “plowing [sic] profits back into the corporation to expand the business by new long-term investment, research and development,” he argues, “the company is urged to pay out its earnings as dividends and buy back its stock to bid up its price.”

Share buybacks, illegal until the Thatcher and Reagan eras, have become routine for corporations. Among UK water companies, the owners of South West Water and Yorkshire Water have both initiated share buybacks. The effect of a firm buying back some of its own shares is to reduce their overall number, thus increasing the earnings per share that shareholders receive. However, there is a cost. The money used could have been deployed to invest in the business or, in the case of water companies, modernise infrastructure or reduce bills. According to one critique, “By systematically draining capital from America’s public companies, the habit … corrupts the underpinnings of corporate capitalism itself.”

Politicians aside, many British people are outraged that these predatory capitalist practices are being used to degrade a vital public service such as water provision, without which life would be unbearably hard. But the uncomfortable fact is that such predatory practices are degrading capitalism as well.

The peril of damaging the delicate flower of ‘wealth creation’ is invariably raised whenever the idea of public ownership or more regulation or taxation is mooted. Sir Keir of Starmer-land, leader of something called ‘the Labour party’, says that ‘wealth creation’ and economic growth must happen first if money is to become available for public services.  But today’s financial managers, in the water industry or elsewhere, aren’t doing anything to create wealth. Instead, by stopping infrastructure or capital investment from occurring, they’re destroying it – to no-one’s benefit but their own.

And this is before the fact that they invariably avoid paying any tax on their ‘wealth creating’ activities is brought into the equation. Because water firms – and many other companies – are drowning in debt, they pay very little tax on their “special dividend payments”. Thames Water, for example, admits it doesn’t currently pay any corporation tax “because of the Government’s Capital Allowances scheme and the impact of our interest costs”.

We have been lulled into accepting the fiction that wealth creation is synonymous with rich people doing whatever it takes to become even richer – that a high share price is a sign of economic vigour  – when, in reality, their labyrinthine money-making schemes can be its utter antithesis.

Arguments contesting the duplicitous concept of wealth creation have generally taken the form of arguing that other people – workers, entrepreneurs or consumers – are doing the real work of creating wealth. The owners, by contrast, do very little, apart from becoming legally entitled to receive it after it has been generated. This is what Marxists call (surplus) value. But even one takes the highly dubious wealth creation ruse at purely face value, it involves the creation of jobs and products or services by someone. How are we to react if, in fact, no value is being created, besides the ‘wealth effect’, the translation of capital gains made in the stock market into luxury consumption?

At this point someone will be sure to pipe up about pension funds. They loom large among the investors in water companies (and electricity firms), either as clients of the private equity investment firms that own them, or as partners in consortia that run water companies directly. For example, the Universities Superannuation Scheme (for academics in the UK) and the Ontario Municipal Employees Retirement System both own large stakes in Thames Water.

But pension funds are as desperate for ‘yield’ as anyone else, in order to pay for the pensions of current and future retirees. They illustrate the absurd quid pro quo we have got ourselves into – that we must accept sewage being pumped into rivers and seas, and bills that keep rising while tax is avoided, in order to ensure barely adequate occupational pensions for thousands of ordinary people.

This is not a choice we should be forced to make. As should be obvious since the financial crisis, the stock market is not, despite superficial appearances and the best efforts of governments through ‘quantitative easing’, an eternally bountiful cash cow – either for money managers or pension funds. The old pension system in the UK – a better basic pension and an occupational (SERPS) scheme – both based on the pay-as-you-go principle offered more stability than endlessly trying to squeeze as much as possible from unwilling companies or privatised utilities that neglect their primary functions in favour of making money.

Still there is something archetypal about water. Along with energy, health services, ports, nursing homes, waste management, car parks, telecommunications etc., it is a real asset with a guaranteed cash flow that makes it irresistibly attractive to asset managers. This is, according to one author, “a society in which the key physical systems supporting social life and its reproduction—so-called ‘real assets’—are increasingly owned by institutional investors [pension funds, insurance companies, university endowments] specifically through the mediation of dedicated asset managers [the plunderers] and their investment funds.”

However, it seems peculiarly odious that water, so basic to the preservation of life, is treated in this manner. One of the first things acts of a Corbyn-led Labour government would have been to renationalise water, while his successor is brainstorming ways to head off the threat of that common sense option being taken. Nothing else illustrates quite so starkly which side they are on.

 

Addendum: Last week ITV broadcast a programme called 'Dirty Water – what went wrong', an investigation into why there were more than 300,000 sewage spills in England & Wales last year. But the programme shied away from the real reason things have gone horribly wrong – privatisation. Specifically a system in which asset managers buy water companies by placing them in debt and then get them to pay for the privilege of being bought out – in the process sacrificing the basic function they are supposed to have, which is to ensure clean water. The programme suggested that bills would have to rise to pay for the investment in infrastructure that will have to take place to avoid the mass contamination of water in the future. But bills have already increased by 40% in real terms since privatisation, with the result of sewage being pumped into rivers & seas across the country. So where has all the money gone?  You don't need me to tell you.

The experience of England is not unique. In the book Our Lives in their Portfolios, author Brett Christophers relates how private equity companies have acquired water systems across cities in America with the result that bills have skyrocketed while the systems themselves have been left in a terrible state. In England & Wales all but three of the water companies in England & Wales have been removed from the stock market by private equity firms.

The incidents are not exceptions, says Christophers. "Rather, they are the more or less inevitable upshot of core features of the model by which asset-managers society operates. They are, in short, a feature not a bug".

I look forward to a TV programme about that.