Why nationalising the water industry is a stupid idea

Firstly here's Sky News' business editor:

The nadir came when, during the drought of 1976, millions of people in Yorkshire, Wales, the Midlands, East Anglia, Devon and Cornwall had their household water supply cut off due to shortages and were forced instead to queue in the street for water from standpipes.

Privatisation enabled investment. More than £130bn has been ploughed into the industry since 1989 - a sum unimaginable under state ownership - and standards have shot up.

There have been plenty of long, hot summers since but, thanks to investment in new reservoirs and pipes, households have not had to endure their supply being cut off as they did in 1976.

That's the deal folks. Some people made some profits and in exchange we got £130bn invested in our water supplies, sewerage, clean beaches, unpolluted rivers and a pile of other services. That's £130bn that the government didn't have to borrow and you didn't have to pay taxes for.

Next, let's look at what happens when government runs the water supply:

According to a class-action lawsuit, the state Department of Environmental Quality was not treating the Flint River water with an anti-corrosive agent, in violation of federal law. The river water was found to be 19 times more corrosive than water from Detroit, which was from Lake Huron, according to a study by Virginia Tech.

Since the water wasn't properly treated, lead from aging service lines to homes began leaching into the Flint water supply after the city tapped into the Flint River as its main water source.

Health effects of lead exposure in children include impaired cognition, behavioral disorders, hearing problems and delayed puberty. In pregnant women, lead is associated with reduced fetal growth. In everyone, lead consumption can affect the heart, kidneys and nerves. Although there are medications that may reduce the amount of lead in the blood, treatments for the adverse health effects of lead have yet to be developed.

Nationalising Britain's water services is a really stupid idea.

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No, nationalisation is not social enterprise scaled up

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Some people really don't understand the 'enterprise' thing at all do they. Here's a chap called Robert Ashton (who describes himself as a "social entrepreneur"):

I happened to be meeting a local MP who had read the blog that morning. He said that whilst he largely agreed, and knowing Jeremy Corbyn felt he was a decent chap, he said that on one thing I was wrong: Corbyn he said doesn’t champion social enterprise, he champions nationalisation.

I’ve been reflecting on that comment ever since and conclude that the only difference, in an ideal world, between nationalisation and social enterprise is scale.

This is, of course, manifestly untrue. The point about social enterprise is that it is a business that, in providing a valued service or product, also makes a wider social contribution. Indeed Robert describes such a thing:

Yet now that school campus is managed by community cooperative organisation. Led by local people, the site now hosts a wide range of community groups; the canteen is now a thriving cafe and new organisations are moving in to the town, renting space, creating jobs and making a lasting difference to the lives of those who live there.

Nationalisation isn't anything like this. It is the forced creation of a state-owned monopoly designed primarilty to promote and protect the interests of that monopoly. The reason why socialists are so keen on nationalisation isn't because it leads to better business or makes a lasting difference to people's lives - it's because nationalisation allows the government to organise business and industry in the interests of the workers (i.e. those who are employed in the nationalised business).

Robert's question as to whether government is a social enterprise is more interesting. But nationalisation is a different matter - its main impact is to destroy social value rather than create it.

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This is (largely) true...

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From The Clown:

If you look back at anything that the British state has done, it has inevitably taken functioning, competing businesses that delivered good services, nationalised them, let them become an overgrown complicated bureaucratic mess with utterly shitty service and a jobsworth corporate culture and then outsourced it equally badly.

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