Press Watch 22/10/19

The Times today reveals that there is ‘sinking support for water nationalisation’. This story is prompted by a new survey conducted by ComRes and suggests that support for taking the water companies into public ownership is plummeting.

ComRes claims that only 27% now support the policy compared to 83% in 2017.

However, Scarlet Standard is sceptical of this claim. We note that this year there have been almost identical stories on March 1st (Telegraph), 16th May (, 19th April (Politics Home) and today (Times).

The ComRes itself contains an undated article about this subject, part of which reads as follows.

‘When ComRes asked the British public their views following the leak, 49% said they supported renationalising the energy industry and 52% supported renationalising Britain’s railways. More recently, that support has risen to 77% for electricity and gas and 76% for railways, with more than four in five of the British public in favour of renationalising the water industry.’

This article itself, however, goes on to argue that there will be a ‘bunfight’ over the cost of Labour’s public ownership policies and goes on to cite highly contentious figures produced by the Social Market Foundation about these estimated costs. More than half the Social Market Foundation funds reportedly come from the corporate sector.

The Comres article concludes as follows ‘While support for ‘nationalisation’ as a bare concept is an easy answer to give to a poll question, it is unclear what real risks voters are prepared to take in the face of what would represent a huge change in the UK’s business landscape, especially in the years after Brexit.’

As we have seen, there is now a fiercely contested debate going on about the costs of public ownership as the corporate sector and their hangers-on in the world of think tanks and lobbyists. Much of the ‘evidence’ which is being produced is wholly specious in character and designed to frighten the electorate.

The Social Market Foundation, for example, has produced ‘analysis’ designed to show that taking water into public ownership would cost £90 billion.

But this figure has been rejected. Not by rabid socialists of the kind who might write by for the Morning Star, but in a fascinating article published in the Financial Times on April 26th 2019 written by Gil Plimmer. The FT quotes Dieter Helm, an economist at Oxford University who has advised the government on the regulation of utilities, who said the SMF report had “virtually no intellectual substance and the [£90bn] figure was wrong”.

The FT refer to calculations made by Moody’s, the ratings agency.

It is argued therefore that a better way of calculating compensation for shareholders would be based on the companies’ regulated capital value, which includes equity and debt.

This figure is set by Ofwat, the industry regulator, and is based on the companies’ average market capitalisation just after privatisation in 1990, and an estimate of future returns on cash flows.

On this basis then, The English water companies’ equity is worth £18.3bn when calculated as regulated capital value minus the book value of the debt, according to Moody’s rather than the ludicrous figure of £90 bn produced by the SMF.

There is one further twist to today’s story in the Times newspaper. And the clue lies in the answer to an interesting question: why is Comres producing regular polls on the water industry and who is paying from them?

The answer may have been provided by Who Owns It? A lobby group which campaigns for public ownership.

Analysing an earlier poll, the group wrote:

“The polling, carried out by ComRes, was funded by Anglian Water, Severn Trent, South West Water and United Utilities.”

And there you have it. The Times, one of our supposed most authoritative newspapers, carrying a story purportedly as a news item about attitudes to the ownership of water, but which if act is the product of actions apparently funded by the privatised water industry itself.

Press Watch is a look at the day's news by Labour MPs.

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