British privatised water, prisons

This video from Britain says about itself:

22 March 2017

Thames Water fined £20m for sewage spill

By Solomon Hughes from Britain:

The dirty firm with pals in high places

Friday 31st March 2017

SOLOMON HUGHES takes a look at the Thames Water and private prison scandals

SEVERAL days ago, Thames Water was fined £20 million for pumping 20 million litres of raw sewage into the waters of the Thames. This is quite literally the opposite of what a firm called Thames Water should do.

The case was well covered in the press because pouring millions of litres a day of visible human waste into the Thames is newsworthy, even these days.

Judge Francis Sheridan, who ordered the fine, said Thames Water had a “history of non-compliance” with rules, and ignored repeated warnings its own staff wrote down in logbooks.

Judge Sheridan said: “Logbook entries reflected the pathetic state of affairs and the frustration of employees.”

Thames Water ignores the rules and ignores its staff. What can be happening?

While the spill and the fine were well reported, only the Financial Times pointed to the fact there might be some structural problem behind the accident, something wrong with its “business model.” The paper spoke to Ian Byatt, the head of water regulator Ofwat until 2000. He told them that Thames Water was owned by financial institutions through “complicated corporate structures,” with parts resting offshore in the Cayman Islands.

According to Byatt, this is a general problem for privatised water firms, where “the boards are largely composed of investors, so the prime issue is how much money are we getting, not how can we best provide a service for customers.”

In short, the firms’ focus on financial engineering to pump cash out of public utilities into their own balances, not civil engineering to pump water into our homes.

Another sign of their expertise at financial engineering has helped Thames avoid responsibility for a massive new £4.1 billion sewer under the Thames, the so-called “supersewer.”

The British government and the EU said they need to build the tunnel for environmental reasons. But the firm says it had too much debt to do the job.

Thames critics say that the company’s investors put debt onto the firms books and take profit away. But Thames Water got its wish: it is only investing a third of the cost. The other investors will be paid by Thames Water customers. Any construction risks — like over-runs or accidents — will be carried by the taxpayer, because the government guaranteed the scheme.

One small but persistent aspect of the story which the Financial Times did not pick up is that politicians have been a big help in this financial engineering. And sadly not just the Tory politicians who privatised water in 1989. Some “New Labour” politicians have been very involved.

Up until the middle of this March, Thames Water was largely owned by an Australian bank called Macquarie — nicknamed the “Vampire Kangaroo,” because of its skills sucking money out of projects.

Until last year Macquarie’s main British lobbyist was Baron Macdonald of Tradeston — aka Angus John “Gus” Macdonald. He was a minister in Blair’s Labour government and a key “New Labour” player.

Macdonald has now retired from Macquarie, and Macquarie has been replaced by the Kuwaitis as Thames Water’s main owner. But another ex-Labour minister has stepped in.

Since 2014, Ian Pearson has been on the Thames Water board. Pearson was Labour’s environment minister until 2007 and after that a Treasury minister.

Pearson was part of the Labour government that failed to rein in the privatised water firms, and was instrumental in the government’s side of the “supersewer” development.

Now he works for Thames Water. The “financialised,” money-focused water firms were brought into being by Thatcher’s government, but they are also tended by New Labour’s ex-ministers.

Trump saves May from prison embarrassment

US PRESIDENT Donald Trump’s reversal of Barack Obama’s prison policy has saved Theresa May from a big embarrassment because when it comes to how to run jails, she is a lot closer to the Donald than the Democrats.

Last August, the US Department of Justice (DoJ) announced it was phasing out private prison firms from Federal work because of a study written by its inspector-general which found private prisons were more dangerous than publicly run jails and more expensive.

The US DoJ study covered firms which are also deeply involved in British privatisation.

For example, US “custodial” company MTC, one of the firms in the study, was last year given control of both the troubled Rainsbrook Youth Detention Centre and all of London’s probation services.

The report included MTC’s Willacy prison in Texas, a grim jail made up of massive tents.

Inmates were so badly treated there that they set fire to it, closing the prison. For the US federal system to abandon their own companies at the same time Britain was embracing them made British privatisation look like a mistake.

But not to worry. At the end of this February, Trump’s attorney general Jeff Sessions reversed the Obama era plan to end private federal prisons.

Sessions said Obama’s anti-privatisation plan “changed long-standing policy and practice and impaired the bureau’s ability to meet the future needs of the federal correctional system.

“Therefore, I direct the bureau to return to its previous approach.”

The inspector-general’s report on private prison failures is just the kind of “expert evidence” Trump rejects.

Trump’s plan means that in the US, MTC are discussing reopening the miserable Willacy jail. It also means that in Britain, May’s government can now continue with prison and probation privatisation without any potential embarrassment coming from across the pond.

Our privatised probation services are a ‘colossal failure’. An investigation finds the service lacks management focus, impossible workloads, inexperienced officers and extremely poor oversight.

Thames Water’s £120 million fine ‘more proof we need to renationalise’. Labour and public ownership campaigners hit out at water giant: here.

Tory Justice Minister admits massive prison privatisation project is ‘completely unsustainable’: here.

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