The banks forced a £800bn bailout on the taxpayer after the derivatives crash, as well as manipulating Libor to enhance their profits or hide their weakness, and now are enmeshed in £10-15bn repayment to clients for their PPI mis-selling scandal. The Big 6 energy companies are likely (though of course they deny it) fiddling the wholesale market pricing-fixing scheme to inflate their profits further, already at £15bn a year.
The big US multinationals have been found to be making vast profits, hidden away in tax havens from the Caymans to Luxenburg, but paying virtually no Corporation Tax to the UK where the profits were made. And now Britain’s water companies are revealed as just as chiselling, paying almost no Corporation Tax but shovelling out cash-loands of dividends (£1.2bn in the case of Thames Water over 5 years) and then demanding that the governmenti.e. taxpayers, pay for major infrastructure projects because they haven’t got the money!
Welcome to the UK corporate sector under neoliberal capitalism.
For years huge quantities of raw sewage have had to be pumped into the Thames when heavy rains caused storage tanks to overflow. It had been realised for at least the last 20-30 years that a major new sewer would have to be built stretching for some 24 miles from around Acton in the west to around Abbey Mills in the east. It would cost about £4bn.
Simon Hughes, MP for Bermondsey, to his credit delved into the background to this and found out the truth of what has happened in the water industry since it was privatised by Thatcher in 1989. He discovered an industrial structure where huge surpluses were creamed off in dividends and then large debts were amassed to cover maintenance and immediate necessary investment, leaving balance sheets so weakened that major new long-term investments could not be paid for. Ove the Thames sewer they then turned to the government/taxpayer to bail them out!
This is a story of staggering personal greed, with chief executives pocketing up to £1 million or more a year, combined with equally staggering financial and social irresponsibility. The revelations of the last few months raise what is now a pressing question: can we trust corporate Britain to deliver, or are they so corrupted by greed that a fundamental review is now needed of corporate structures and the role of private markets?
