Well, that’s an upgrade then

“But I stress this is a privilege. And when you think about it, it is a totally absurd privilege. Just imagine that today somebody came up with this idea that one or two people – and one is enough – can sign a piece of paper and say that they want to be a limited liability company and as a consequence if something goes wrong in the trade that they undertake then, in the vast majority of circumstances, they will not be responsible to the creditors of the company that they have created for the debts that it has incurred, even though those creditors, whether they be employees, or suppliers, or a tax authority, have incurred liabilities with that company in good faith. Everyone would say that this was an abuse of the rights of those employees, those creditors, and that tax authority. And they would be absolutely right to do so, because limited liability is an abuse of the rights of those people.”

This from a man who runs an LLP and benefits from limited liability, the second member of which is his estranged wife whose expertise, as a former GP, is very far from tax and economics.

Cvnt.

As regular readers of this blog will know, I have taken some interest in the activities of the English water companies in recent years.

I am, of course, not alone in doing so, but I am aware that the report that I wrote on the financial affairs of these companies in 2023 still attracts quite a lot of attention from those interested in ways in which the financial mess that these companies have created, largely as a result of their incompetent management of the water system, can be resolved.

And your observations on the Water companies suffer from the same defect of utter and complete lack of specific subject knowledge and complete lack of awareness regarding your ignorance that characterise your meanderings on almost every topic, not least the political economy which one ‘university’ has seen fit to employ you as a specialist in,

The question was posed by my old friend and tax justice colleague, Lord Prem Sikka. The response was provided by a former Labour MP who served for four years before being appointed to the House of Lords and who would appear from her CV to have no relevant skills in this sector or with regard to anything to do with corporate finance or economics.

As will be noted, Baroness Hayman avoided the question Prem asked by simply referring him to a report by a right-wing tank, the Social Market Foundation.

You have no understanding of Corporate finance as witnessed by the removal of your ICAEW membership. Your economics understanding has been shown to be lacking not least by the commentator Tim Worstall, whom you have consistently refused to debate or even respond to for the last five years or so. There are around 25,000 commentators on Twitter who you have blocked for making valid criticisms to which you have no response.

The claim made by that Foundation that it will cost £90 billion to nationalise the water industry is quite absurd. Firstly, this presumes that an asset purchase would take place, and that would be very surprising. The likelihood is that at least some of the debt obligations of these companies would have to be taken over in any such nationalisation, which would mean that the actual cost of nationalisation would be lower.

So is your contention that taking over debts means that those debts are being written off for accounting purposes? Is that an example of your ‘superior’ knowledge of Corporate Finance as against Baroness Hayman?

This valuation also presumes that these companies are going concerns, which is by no means the case. In particular, if the £260 billion investment programme that the House of Lords have themselves identified to be necessary to bring the water systems managed by these companies up to an acceptable standard takes place, as is very obviously necessary given the importance of water as the basis for life in the UK, then not one of the companies in question can in any meaningful sense be considered to be viable going concern.

In addition, on the basis of current acceptable levels of water charging, there is no chance whatsoever that these costs can be covered without resorting to state support and for the government to pay for a company that can only maintain its business with substantial government financial support makes no sense at all.

So the proposal is to simply not indemnify the shareholders against any losses – asset expropriation without compensation. It would certainly set an interesting precedent. It’s particularly interesting given arguably the most recent example of it internationally would be the country of Zimbabwe, as undertaken by the late ‘Bob’ Mugabe. Throughout your prolific blogging career you have always scorned people comparing your policies with Zimbabwe under Zanu PF but here we see direct emulation.

I should also add all these companies do, of course, need to become net-zero compliant. None would appear to have any meaningful provision for the cost of doing so included in their accounts. In that case, this further factor needs to be taken into account when undertaking an evaluation exercise for the purposes of nationalisation.

So if any company doesn’t take account of Net Zero then the state has a right to expropriate their assets? Let’s hope they don’t apply similar logic to properties in Fenland towns.

Put all these factors together, and the valuation provided by the Social Market Foundation is not just wrong; it is ludicrously inaccurate. The standard assumption that most economists make that is implicit within it, which is that the current reported state of these companies will continue into the future, is obviously wrong. The whole question of nationalisation arises precisely because that is very clearly not the case. No one would even consider nationalisation if these companies were fulfilling the task that they were expected to fulfil at the time that they were privatised, but they are not doing that. The Social Market Foundation has, therefore, undertaken its work on the basis of a wholly incorrect assumption and for the government to rely upon their work to justify the continued private ownership of these environmentally bankrupt concerns appears to me to be an act of gross negligence on their part.

Thankfully your inability to co-operate with almost any other parties or individuals mean that your opinion is viewed increasingly as totally irrelevant by the government of the day whatever its hue, and given your entire philosophy is driven by a level of evil thought to be largely only a hypothetical possibility this is no doubt good for the country as a whole.

my old friend and tax justice colleague, Lord Prem Sikka

Wait, Spud has a friend? I understood he’d fallen out with anyone who’d ever worked with him.