Saturday 3 April 2010

Wet or Dry?

In response to this post of mine, Subrosa asked:
David, if the SNP privatise Scottish Water they'll lose so many votes in this area anyway. What would be bound to happen is that prices would go sky high.
Well, yes and no. I've no doubt at all that such a move would cost the SNP votes. But that's because of the almost universal lack of economic understanding here in Scotland. Not that it's much better elsewhere of course.

Earlier today I bumped into historian Michael Fry, formerly a Tory candidate and now a supporter of the SNP. Michael has an article about water privatisation in today's Scotsman but unfortunately it's behind the subscription wall. However I have the paper edition!

Michael explains that English water prices shot up after privatisation as a direct result of years of underinvestment by the state:

We might pause to reflect that no other country follows the precise Scottish model of regulated public ownership, whereas all over the world countries have adopted the English policy of straightforward privatisation. One of the reasons is that the English have succeeded in improving the quality of their water, and far faster than we have for all our babbling burns and limpid lochs.
For me the issue is primarily a moral one. The state is the only body in society that can initiate force without attracting the attentions of the police. If there is to be a state at all (arguable), it must be limited to protecting us from aggressors. Everything else, including water, should be provided by the private sector.

Michael concludes his article by asking:

People often ask me how I, a cold-hearted capitalist, can bring myself to support the bunch of wooly lefties who now rule us from Holyrood, as I will again on 6 May.

Here is my answer: reality makes capitalists of us all. It is like nothing so much as a douche of cold water.

I agree with that, except for calling capitalists "cold-hearted". Capitalists are warm-hearted folk who provide people with goods and services without the support of taxation extracted from others.

I really do look forward to that "douche of cold water" being piped, perhaps, directly from Loch Katrine to the Glasgow City Chambers.

1 comment:

David Farrer said...

Comments made on previous template:

Water ist too important to be a subject to bureaucrazy and should never be a tool of power for any state. 
Well, if I go to my local supermarket, there are plenty of different types of bottled water. Sparkling, Non-sparkling, Scottish origin, French ones, one from Wales and I'd get a German one if I'd wanted one from home. 
It's ridiculous to argue in a rainy country like Scottland that it's not possible to organise water supply for cooking, showering, bathing and washing maschines, and -of course - tea making and distilling other than by means of a free market. 
If the infrastructure of having water pipes in the street gives you a kind of monopole, the company maintaining them should be owned by shareholders and property owners living at that very street.

13 April 2010, 14:36:30 GMT+01:00
– Like – Reply

The question that must be asked here is not who owns the company but how effective is the company?  Scottish Water is a success story for Scotland, it shows that a company can be efficient and state owned.  Now that the oppurtunity cost of the borrow requirements are coming into light (and rightfully so) questions should be asked whether SW should borrow commercially. 
Its only at this point we will see how truelly efficient the company is.  Sure this must be considered before anyone speaks about the P word? 
The publc must make the distinction between spending and investment, would you sell your house (an investment) to go on a spending spree...?

12 April 2010, 15:46:57 GMT+01:00
– Like – Reply

David Farrer
It's ripe for those who plunder state owned organisations. 
Only if the price is too low. 
I have no recollection of anyone desperate to buy Scottish Water some years ago when it was in need of modernisation. 
The price being asked must have been too high.

4 April 2010, 16:21:26 GMT+01:00
– Like – Reply

Whilst I understand many parts of the country's water supply system required upgrading I have been told that in other areas expenditure was minimal.   
Private companies make profits for shareholders. Scottish Water has invested a considerable sum upgrading Scotland's water supply system.  It's ripe for those who plunder state owned organisations. 
I have no recollection of anyone desperate to buy Scottish Water some years ago when it was in need of modernisation. 
Now that endless billions of taxpayers' money has been spent on it then the suggestion is to sell it off. 

4 April 2010, 10:22:26 GMT+01:00
– Like – Reply

Water is the most precious resource on this planet and should never be privatised no matter the economic arguements.   Money is a man made product to fuel capitalism and isn't worth the paper its printed on.

3 April 2010, 17:23:23 GMT+01:00