Water financing

There is no hope that renationalising the water companies would prove to be anything other than worse, probably far worse, than sorting out the current muddle. There will be a delay while this is attended to and egos are adjusted to a tolerable level.

But there is a populist belief that because the boards have historically paid too much too quickly to shareholders and bondholders current management should not be properly remunerated to sort out the mess. This is uneducated stupidity - characterised by Feargal Sharkey and Co..

The original mistake was to fail to identify the terms of privatisation in sufficient detail sufficiently far ahead - rather as construction companies who have entered into ten year contracts have done in the past. Had this essential provision been attended to the accounts would have had to show a true and fair view and the auditors would have had to consider the wisdom shown(or not shown) by their client boards.

Sir John Cunliffe has today set out the resolution of matters. And it is going to cost a lot of money - just ask the bondholders - they really have had a drenching. All water users will pay.

*****

Tom Hayes's case is to be formally settled in public at The Supreme Court on Wednesday. I wish him well - he has shown steadfast self-control where most would have lost their temper.