Government has allowed water companies owned by foreign investment funds to sell reservoirs

The dried-out Beacons Reservoir in the Brecon Beacons after the recent heatwave. The wooded island (bottom right) is usually surrounded by water 

Two water companies have introduced hosepipe bans, and others are encouraging consumers to be mindful of their water usage.

The London Economic reports that dozens of reservoirs across the country have been sold by water companies (including those listed below)  and no new ones have been built in the last 30 years.

In 2006 Thames Water (owned by Kemble Water Holdings Ltd which includes investment fund companies from the United Arab Emirates, Kuwait, China and Australia), sold its reservoir at Cheshunt, was sold to developers to build 249 flats after the water company said it was no longer needed. Its water storage facility in Enfield was sold to a house builder.

A 2018 document from Southern Water (owners include Australia’s Colonial First State Global Asset Management) said the company would decommission 43 of 93 pre-1900 reservoirs between 2023 and 2030.

In 2015, South West Water (stakeholder Australia’s Colonial First State Global Asset Management) sold off a disused plot, including its Kilworthy reservoir – which went for £170,000 – in a bid to cut costs and bills. The plot was advertised as a potential “Grand Designs” project, with planning permission for a house.

Sir John Armitt, the chairman of The National Infrastructure Commission, the Treasury’s executive agency with oversight and regulatory duties, has called for more reservoirs to be built:

“It’s been three decades since the last major supply reservoir was built in England and the situation we are facing this summer indicates what we can expect to happen with increasingly regularity in the future. If we want to avoid severe shortages in future, we can’t afford to take our foot off the pedal once the rain comes and this summer becomes a memory.”

Dr Andy Hughes (right), a reservoir expert who has advised Thames Water and Southern Water, said companies often kept reservoir facilities but were unable to use the water from them, as they were no longer connected to working treatment facilities.

Water industry sources said companies faced pressure from Ofwat to close old facilities to save money, as well as scrutiny from the regulator over the financial benefit of opening new ones. 

Water companies say they face widespread opposition in building new reservoir facilities, despite a recognition they will be increasingly needed under drier conditions as a result of climate change.

Emma Gatten reports that the Environment Agency has allowed the water companies over the last 20 years to borrow unsustainable levels of debt, while paying out excessive dividends to shareholders rather than invest in capital equipment (for the moment ignoring excessive executive pay and bonuses).  Ofwat’s new proposals to improve financial resilience in the sector are far too little, far too late. 

Under investigation: George Eustice, the minister responsible, hopes to remove 80% of pollution by 2050

The EA has also failed to enforce the law about dumping raw or partially treated sewage into our rivers – so sewage is abundant in many rivers, often when there is no “storm overflow” excuse.

At the foot of her article, Andrew Sells, chairman of Natural England from 2014 to 2019, said the sell-off, with no replacements, was evidence of water companies putting profits before water resilience:

“No doubt some reservoirs had reached the end of their working lives – but in abandoning this critical infrastructure, without any replacements, they have again put short-term profits ahead of long-term water supply”. 

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At last ! UK minister declares: ‘burning biomass for energy doesn’t make sense’

Drax power station in Yorkshire. The government has spent millions subsidising the burning of pellets in the facility over the past decade 

Kwasi Kwarteng, Minister for Business, Energy and Industrial Strategy, told a group of cross-party backbench MPs that shipping wood pellets from Louisiana is costly and ‘doesn’t make any sense’ Drax power station in Yorkshire.

The FT reports that, during a meeting with a group of cross-party backbench MPs, who raised concerns about the burning of wood pellets, a type of biomass, the minister said that that burning wood pellets is not sustainable and “doesn’t make any sense”.  He added that the government had not fully investigated the practice of importing US-made wood pellets to be burnt for energy by power company Drax.

A year ago, Jonathon Porritt set out the case against burning biomass

He listed the support for Bioenergy with Carbon Capture and Storage (BECCS) from the government, the Committee on Climate Change, the International Energy Agency, the Intergovernmental Panel on Climate Change and every major oil and gas company in the world, as well as a number of huge engineering conglomerates including Mitsubishi Heavy Industries and Bechtel, with whom Drax is now in partnership.

All the life cycle data used by Drax to calculate the carbon footprint of BECCS is, according to its critics, either inherently flawed or far too narrow in scope

Jonathan points out that the data does not include emissions from the original harvesting of the timber, or not taking into account the time lag between mature, carbon-rich trees being cut down and the growth of newly-planted trees that can only sequester CO2 relatively slowly.

BECCS would be even more expensive than Hinkley Point

He cites an analysis from Ember, an independent thinktank, which concludes that around £30bn of taxpayers’ subsidy will be required over a 25-year period to make the economics work, adding £16 to the average annual energy bill. This makes it an even more expensive proposition than Hinkley Point – which, as readers of his blog will know, is “the most outrageously wasteful use of taxpayers’ money ever seen in the energy sector anywhere in the world”.

Last year Sasha Stashwick, the Director of the, Industrial Policy, Climate & Clean Energy Program (Natural Resources Defense Council), reported that the IPCC has made it clear that we must immediately and dramatically reduce carbon emissions to avoid the worst effects of climate change.

She gives four reasons why the claim that the IPCC supports the burning of biomess by the industry’s proponents like Drax is wrong and concludes:

“Reliance on forest-derived wood pellets for largescale electricity generation has increased dramatically over the last decade. Yet, the science is clear that deploying forest biopower or BECCS plants at a global scale risks worsening climate change at a time when the IPCC says we have no time to waste on false solutions”.

 

 

 

 

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Discovered by chance: Ian Hislop’s contribution to the parliamentary select committee on standards in January

Highly recommended for content – or – for the politically uninterested, for its theatrical impact: https://www.youtube.com/watch?v=a3O8mwDFo4M

The writer cancelled a Private Eye sub years ago, feeling that it was no longer ‘ahead’ of the news, and stopped watching HIGNFY because it had become unpleasantly sneering and self-satisfied,

However Ian Hislop’s valuable contribution to the parliamentary select committee on standards in January was extremely powerful and effective as were the interventions of his colleagues Solomon Hughes and Richard Brooks.

It will appeal to those on the original mailing list of this website which was set up thirteen years ago to raise awareness of the ‘revolving door’, rewards for failure, widespread behind-the-scene lobbying and party funding which corrupt the decision-making process here and abroad. This meant that the social, economic and environmental challenges facing this country are not being effectively addressed, due to the distortion of policy-making by those on ‘an inside track, who wield privileged access and disproportionate influence’ according to a 2009 report by the Parliamentary Public Administration Select Committee [PASC].

The Youtube blurb says : “ Proceedings became combative and at times cringeworthy as the journalists began reading out the MPs’ own registers of interest as examples of the lack of transparency in British politics. Tories Sir Bernard Jenkin and Alberto Costa both seemed quite distressed”.

One useful statement made by Ian Hislop was that MPs should put decisions to accept money, gifts and apponitments to their constituents during their election campaign .

Two of the viewers’ comments:

Christopher Stevens:

What an absolutely atrocious system. Firstly, elected MPs and officials on the committee are asking non-elected bodies (journalists) on how the Government should uphold the Nolan Principles. Secondly, as Hislop says, why are MPs confused about the rules?

The answer is seen towards the end of the clip where an MP, asked about gifts becomes increasingly uncomfortable and the chair shuts down the question and points raised. That is the problem. This is just a token gesture and a process which government adopts time and time again, where serious questions are kicked into the long grass and discussed ad nauseam until the public and the very issues raised have been long forgotten.

The simple truth is that the relationship between MPs & Lords and that of big business and the lobbying industry is now too close and the waters muddied. There can be no reason why an MP paid over £82,000pa plus generous expenses has any employment outside the house for his/her term as an MP.

This nonsense about MPs elected for their knowledge in industry or other areas is a weak argument. After leaving the house, MPs should not be allowed to take up positions which they are actively headhunted to provide services to that industry because of what they know about “process”.

The process is simple: The investigations and policing of the system are deliberately weak. MPs and Lords are quite happy to accept jobs outside of the MP role because this is insurance if they are to be booted out of office after an election. The declaration system is full of holes as there is no real way of telling what these declarations mean for the general voter, even if they bother to look at the register of interests.

The system is then topped by a bunch of MPs & lay people who, judging by this lot, have absolutely no interest in changing the system or are so innately thick they have to ask journalists who have a sketchy view on ethics from previous cases brought nor do they wish to ask embarrassing questions to avoid the reputation of the Right Honourables being tarnished.

Fizz Disco

Well done to Ian, Richard and Solomon for not letting this group steer the agenda away from the basic fact that there needs to be more control with real power and teeth when it comes to lobbying.

Again and again, Ian asked ‘why do you think these companies are paying out this money?”…….. did none of the MP’s think that a open recording of their meeting would be shelved and not seen publicly for people to make a judgement. He ended:

“No one who sees this recording can be in any doubt that parliament doesn’t have a grip on lobbying and dodgy payments to MP’s . . . is there a deliberate attempt here to keep things the way they are rather than act on Ian’s evidence?”

 

 

 

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Government could further Port Talbot’s conversion to zero-emissions steel

Professor Julian Allwood, Department of Engineering (Cambridge) and joint-inventor of a zero-emissions cement, has welcomed the news that the managers of Tata Steel UK’s Port Talbot plant are now aiming to convert to electric arc furnace production. He adds that this move – reported in an earlier article in the Financial Times – is “long overdue and deserving of government support”.

Tata Steel’s Port Talbot plant (below) is one of the biggest emitters of carbon dioxide in Britain. In 2020, the sector, which employs nearly 8,000 people across all its operations, accounted for 11.1% of Britain’s industrial emissions and 2.6% of all UK greenhouse gas emissions.

Under decarbonisation plans, it is thought that Tata would close its two blast furnaces at Port Talbot, stop primary steelmaking and build two electric arc furnaces which would recycle scrap steel and are less carbon intensive than blast furnaces.

The Climate Change Committee, a government advisory body, has advised that the UK steel industry needs to be “near zero” by 2035 if the country is to meet its pledge to reach net zero greenhouse gas emissions by 2050.

Building electric arc furnaces and decommissioning the blast furnaces would cost around £3bn, with Tata seeking £1.5bn from the government, informed sources said, but the government’s current decarbonisation funding

for the sector has already been exhausted. Professor Attwood points out that as global overcapacity is holding steel prices down, short-term investment in new equipment cannot currently be made by the private sector.

If the government does not contribute half the costs and help to meet its net-zero pledge, the plant will probably close; Tata has been building up its steel business in India, where demand is growing strongly and return on investment is far higher than in the UK.

Professor Allwood explains that it is a certainty that global capacity for electric arc furnace steel recycling will treble:

“All steel made in the past is returned for recycling, on average 35-40 years after it was first made. The UK discards around 10mn tonnes of scrap steel each year. This will soon be a more valuable commodity than iron ore or coking coal, yet we currently export five-sixths of it, at low cost. This simple logic based on volumes is reinforced by the requirements of climate mitigation”.

He comments that, as the UK is making good progress with decarbonising its grid, all-electric steel recycling is compatible with its zero-emissions commitments and adds:

“As the global urge to decarbonise prioritises electric steelmaking . . . the UK could be at the forefront of a renaissance in zero-emissions steel. It would be a wise investment to fund that transition now”.

 

 

 

 

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Bargain basement Britain 15: Morrisons buyout loads banks and private equity funds with debt instead of profit

Will this deter vulture funds from acquiring and asset stripping British businesses – at least for some time?

The £10bn takeover of grocer Wm Morrison by US private equity group CD&R (Clayton, Dubilier & Rice) was the UK’s biggest LBO, (leveraged buyout: relying on borrowed money – bonds or loans) for years. The FT explains:

The fast spread of the Omicron coronavirus variant was making investors wary but Goldman Sachs had already sold £1.2bn of the debt and were planning to syndicate the remainder (‘hundreds of millions of pounds‘) at the end of December ’21 to a large group of investors.

The invasion of Ukraine, however, set off an economic shock that would turn the Morrisons deal from ‘a dream ticket for the bankers into a nightmare’.

               Left, CD&R’s operating partner concluding one of their better deals

The group of 16 underwriters have taken a more than £200mn gross loss on selling the debt this year, according to Financial Times calculations. Marking the remaining unsold debt to market (recording its value at its current market price) has left ‘a further £400mn hole’.

One reader commented. “All these bankers and investors like to think that they are bright – playing with other peoples’ money, jobs and livelihoods. And for what?  Our economies would be better off if such transactions had never been thought of in the first place”.

 

 

 

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Whistleblowers 20: the BBC speaks out with remarkable bravery

https://www.bbc.co.uk/news/uk-62083196

Blowing the whistle so dramatically is remarkable.

Undeterred by the fate of Julian Assange for doing just that – is the threatened BBC deciding to ‘go down fighting’?

 

 

 

 

 

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Media 122: scientists urge journalists to ring the alarm

‘You are literally a key group in the fight to save Earth and humanity’s future’.

Media Lens reports that climate scientists are warning that ‘every heatwave occurring today is more intense due to climate change.’

But the media isn’t ringing the climate alarm – even after reporting the following stories (two of the six listed). Donnachadh McCarthy, climate columnist at the Independentcomments that there were ZERO mentions of climate crisis in accounts like these.

  • .On 15 June, the Guardian reported: ‘More than 100 million Americans have been advised to stay indoors amid record-breaking heat, with experts warning that such temperatures could become the norm amid the climate crisis. By Wednesday as many as 107.5 million people, more than a third of the US population, had been warned to stay inside, as a potentially lethal combination of extreme heat and humidity settled over much of the country. Meteorologist Matt Beitscher told CNN: ‘This is a day where not only folks who are susceptible to heat-related illnesses, but really just about anybody that’s going to be outside for an extended period of time is at risk for heat-related illnesses.’
  • The BBC reported: ‘Outdoor public events have been banned in an area of France as a record breaking heatwave sweeps across Europe…On Thursday, parts of France hit 40C earlier in the year than ever before, with temperatures expected to peak on Saturday. Spain, Italy and the UK are also experiencing high temperatures.’ It is reported that the current drought in Italy threatens more than 30% of national agricultural production. (Right: a swift ready to be set free after being nursed back to health in Spain.)

Addressing a climate conference organised by the White House, António Guterres, the UN secretary general, warned: ‘We seem trapped in a world where fossil fuel producers and financiers have humanity by the throat’.

He continued: ‘For decades, the fossil fuel industry has invested heavily in pseudoscience and public relations – with a false narrative to minimise their responsibility for climate change and undermine ambitious climate policies . . .They exploited precisely the same scandalous tactics as big tobacco decades before. Like tobacco interests, fossil fuel interests and their financial accomplices must not escape responsibility.’

Guterres stresses: ‘Nothing could be more clear or present than the danger of fossil fuel expansion

Even in the short-term, fossil fuels don’t make political or economic sense.’

An observation on Twitter brought the dire state of the emergency home. In 2014, this French weather presenter announced the forecast for August 18, 2050 as part of a campaign to alert to the reality of climate change. Now her forecast that day is the actual forecast for the coming 4 or 5 days, in mid-June 2022.

The forecast showed temperatures in 2050 reaching the higher thirties, 40 and even 43. The forecast for Saturday, June 18, 2022 closely matched the fictional forecast 28 years and two months early. In fact, at 41, Bordeaux 2022 was one degree higher than the predicted temperature for 2050.

Scientists like Peter Kalmus (right) are now pleading with the corporate media to drop the denials and phony ‘balance’, and hit the alarm button with full force.

Scientists are becoming citizens among us. Kalmus tweeted recently: ‘If you think about it, every problem in society, including Earth breakdown, comes down to the ultra rich controlling everything and making self-dealing decisions. The single biggest media failure of all time is how the media still isn’t treating global heating as an emergency.’ He added: ‘Climate journalists, the climate emergency just isn’t a normal thing to report. There need to be new rules/norms/practices when our entire planet is at stake. It’s a singular story. You’re not just reporting a story, in other words. You are literally a key group in the fight to save Earth and humanity’s future’.

Media Lens author, David Edwards, asks how we can escape state-corporate control of the means of mass communication. He believes that a powerful step in the right direction must be for even more scientists to radicalise and mobilise – to look deeply and understand the true nature of corporate politics and corporate media – and to act together to demand public insurrection, rebellion and revolutionary change.

 

 

 

 

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Lancet study recommends close scrutiny of the private sector’s role in the NHS

“Our findings suggest that further increases in NHS privatisation would be a mistake,” said Dr. Aaron Reeves (below right) University of Oxford) co-author of the study, which may be read here.

The Financial Times (paywall) reports that this research, funded by the Wellcome Trust and published in The Lancet, suggests that the rise in outsourcing from 2013-20 has led to ‘higher rates of treatable mortality’ (deaths from such conditions as heart attack, stroke, colorectal and breast cancer).

Increased levels of outsourcing were potentially linked to an extra 557 avoidable deaths in England. 

The study may be read in full here. Its results were summarised on the Lancet’s website (extract):

We found significant increases in for-profit outsourcing between 2013 and 2020 (appendix p 20). Figure 1 shows the changes in outsourcing since the beginning of April, 2013. Figure 1A shows a 365-day rolling average of total commissioning expenditure received by for-profit companies.

It shows that overall levels of outsourcing to for-profit providers consistently increased since 2013, rising to more than 6% of total commissioner spending in England by 2020 (£323 million out of £4999 million for the first 3 months of 2020). It also shows that the majority of this outsourcing was received by health-care companies . . , Based on observed changes in outsourcing spend and treatable deaths for each health board, the analysis shows 557 additional deaths between 2014 and 2020 might be attributed to changes in outsourcing.

The study analysed details of more than £204bn in outsourcing expenditure from the websites of 173 of England’s 191 regional health boards between April 2013 and February 2020. It found that an annual increase in outsource spending of 1% is “associated with a rise in treatable mortality of 0.38%, or 0.29 deaths per 100,000 population, the following year”.

Co-author Benjamin Goodair (right) said: “While some have argued the Health and Social Care Act [2012] would improve the performance of health services by increasing competition, our findings add merit to longstanding concerns it could instead lead to cost-cutting and poorer health outcomes”.

Dr Reeves said that the findings of this research are timely. as the way ln which England’s health boards are organised is due to be overhauled: “This creates a key moment where the role of the private sector within the NHS must be closely scrutinised.”

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Broken Britain 40: Government minister wants to reduce controls on City executives’ pay but enforce public sector wage restraint

“Ministers are planning to boost city bosses pay whilst demanding wage restraint for everyone else”

An unattributed article reports on a leaked copy of a letter seen by the i newspaper; the PM’s chief of Staff, Kwasi Kwarteng, a Cabinet Office minister, has written to Rishi Sunak, the Chancellor, asking him to remove restrictions on director and non-executive director remuneration and attract companies to the UK following Brexit.

These inflation-breaking pay rises are planned at the same time as households were hit by record price rises – the highest level of inflation since March 1982.

The Prime Minister’s spokesman told reporters it would be “reckless” to give across-the-board pay rises in line with inflation to teachers, nurses, and others

UNITE’s general secretary, Sharon Graham, says: “it’s not hard-pressed workers who are driving inflation, it’s whole swathes of corporate Britain who have lined their pockets.

“Runaway profits are driving the inflation that is threatening a national pay cut, and yet the vast majority of politicians remain silent”

UNISON assistant general secretary Jon Richards said: “Under-pressure health, care, school and council services desperately need staff to be given a pay boost that matches runaway prices.”

Royal College of Nursing general secretary and chief executive Pat Cullen said: “A pay rise that goes significantly above inflation is crucial to the recruitment and retention of skilled nursing staff.”

“Wage restraint? Absolutely not. It’s time for profit restraint.”

RMT president Alex Gordon tweeted that the figures indicated why workers saw the need to strike, adding: “HSBC bosses scooped £596,000 each in bonuses last year on top of average £479,000 salaries”.

See the heated exchange here.

At Prime Ministers’ Questions, Labour’s Kate Osborne (above,right) chsllenged PM Boris Johnson, saying: “Rail workers are on strike, Royal Mail workers, NHS workers, teachers and even barristers are on the verge of taking industrial action. “All workers are struggling to cope with the worst cost-of-living crisis in history.

Sharon Graham said, “While the governor of the Bank of England and the Prime Minister want workers to think it’s irresponsible to demand that their wages keep pace with prices, they won’t lift a finger to do anything about the ridiculous wealth being amassed by the rich and powerful.”

 

 

 

 

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“A wealth tax is a necessary step for levelling up”: Prem Sikka

A summary of the thoughts presented in his article.

The cost-of-living crisis has been facilitated by the state though austerity, wage freezes, reductions in social security payments and erosion of welfare services.

Professor Prem Sikka (right) stresses that the eradication of poverty and reductions in inequalities should be a key priority.

This week the House of Commons debated a motion calling for a wealth tax, tabled by Richard Burgon MP (below left). It was supported by most of the speakers, but opposed by the government.

The UK income distribution is skewed in favour of the wealthy. Nearly 22 million adults (over 40% of adults) survive on annual income of less than £12,570, but pay VAT, fuel duties and council tax at the same rates as billionaires.

The poorest 10% of households pay 47.6% of their income in direct and indirect taxes, compared to 33.5% by the richest 10% of the households.

The Organisation for Economic Co-operation and Development (OECD), has argued that “capital income taxes alone will most likely not be enough to address wealth inequality and suggests the need to complement capital income taxes with a form of wealth taxation”.

Civil society organisations, such as Oxfam, have urged the government to introduce wealth tax to “rein in extreme wealth and monopoly power”. It adds that “billionaires and corporations in the food, energy, pharmaceutical, and technology sectors are reaping huge rewards at the same time as the soaring cost of living is hurting so many”.

The UK now has 177 billionaires with combined wealth around £653bn. Despite austerity and cost of living crisis, the wealthy have grown richer.

Members of Patriotic Millionaires UK, some of the richest people in the country, are openly urging the government to reduce inequalities and social squalor by levying a wealth tax. In an open letter to Chancellor Rishi Sunak, thirty millionaires said last October:

  • “We know where you can find that money – tax wealth holders like us.
  • We can afford to contribute more.
  • We want to invest in repairing and improving our shared services.
  • We are proud to pay our taxes to reduce inequality, support stronger social care and the NHS
  • and to ensure that we’re building a more just and green society”.

Millionaires Marlene Engelhorn and Phil White joined a Davos protest calling for higher taxes on the wealthy

A wealth tax can take many forms. The Wealth Tax Commission recommended a wealth on individuals rather than households at the one-off rate of 5%, spread over a period of 5 years i.e. allowing a tax rate of 1% to be paid over each of the five years. With an asset threshold of £500,000, some £260bn could be raised for redistribution. If the threshold was raised to assets over £2m, some £80bn could be raised. Other formulations are also possible.

Will a government consisting of some of the richest people abandon millions of people to misery, hardship and untimely death or levv a wealth tax in order to reduce inequalities and enable everyone to live a fulfilling life?

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.

 

 

 

 

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