Listen: Privatised water: should the UK reconsider?
"Years of steady and rising bills have raided the decades-long consensus in Britain, the private companies run things more efficiently than the state privatized. Water utilities have come in for particular criticism and are among the companies targeted for nationalization by the opposition labor party, but would cost prohibitive. Joe Plymouth discusses this question with Jonathan Ford. The question of The Wilshire industry's future in Britain has become a very very heated one with labor promising to nationalize industry. It comes to power claiming this will make things better for customers. And obviously the industry extremely anxious and cross about the way in which its future has been put into question in this way. I suppose the first thing Joe is correct. Say that customers pay more when water services are in private hands. Well, it depends peel comparing too but a study that compared water prices in England and Wales with Scotland where it was nationalized shows that they more expensive in England miles nothing bills or seventy pounds higher in England. And according to the national orders office water prices, and then Linda wells with forty percent higher in twenty. Twelve than they were privatization. So there's something behind the analysis that the privatization took place hasn't been overwhelmingly of benefit to the customer. I mean, obviously, the industry itself talks about the large amount of investment, it's Putin. But let's turn now to the story that you've written which is about the question of how much it would cost to privatize the industry. Your story contains some calculations from Moody's the credit rating agency, which says that the cost to the government of nationalizing water would be about fourteen and a half billion pounds. Now that significantly lower than the forty four billion pounds, which was cited in a pretty well circulated paper from a think tank called the social market foundation last year. Now, what it counts for that big difference? I mean have water shares collapsed in value since the SMS came out with their number about the mechanism that you used labor. Isn't proposing to make takeover bids for companies in the stock market at stock market prices what they're planning to do is to buy out. The regulated company that owns the S and delivers the water from the holding company. So labor has said that it would by the water companies on the basis of the book failure, which is essentially the value of the minus the did and the calculation by Moody's food. The if t has is to Mason that that's around fourteen point five billion, of course, that only a starting point because what labor is also saying is that they would look at some of the costs that have been incurred since privatization. So they may for example to duct the one billion pound fund pension deficit that's been ramped up since privatization and taken to count things such as land sales with the worst company sold off a lot of the land. Don't think that the price of that should be included in compensation price. Is that some people would say that forcing people to sell you the company at net asset value be quite tough. I mean, there are some companies in the stock market which trade at or below book value, but a lot of them don't and this is a quite profitable industry. So is that not a bit unfair to basically start from the position that you're simply going to pay what the assets are worth and they more. Well, the accurate that cure me, cool, but on the labor party have made and infect point with seem to agree with Michael Govan. The conservative party is that these companies have made excessive return since privatization, and because of that they don't see that they should pay them a premium based on their existed for tunes England and Wales and fat to the only countries in the world to have privatized. The worst companies on the spaces handing over the regional water supplies to private companies nine thousand nine hundred eighty eight with note it and in fact, giving them. Grant of one point five billion since then the wreck top fifty one billion pounds, borrowing and paid out fifty six billions in David's say labor is saying why should we pay these companies that wrecked up all the"