Ofwat have at last got there â€“ they want competition in water supply to tackle the shortages, the high prices and the single-quality offer we all face. I am delighted. Letâ€™s hope the government will now get on with it.
Like all monopolies, the water industry fails to innovate, fails to make enough supply available, and over-charges. You can have any type of water you want, as long as it is the standard-issue drinking-water quality, adulterated by chemicals it thinks are good for you, and sometimes with forced medicines as well. You have to tip expensive drinking water down the loo, wash the car with it, and water the bedding plants â€“ unless itâ€™s hot and dry, in which case you will probably be under a hosepipe ban.
Once competition is introduced, all kinds of things will become possible. Let me hazard a guess, by peering into a liberated future:
1. Cheaper kits will be actively marketed, to harvest the water from your roof to flush toilets and wash the car;
2. More borehole water will be tapped into, and new reservoirs will be built, so we do not have to ration water if we ever get a hot summer again;
3. Better pipes will be put in to waste less water;
4. Water prices will go up by 20% less than under monopoly regulation as competition comes in â€“ we may even get lower bills;
5. Business consumers will be able to buy different quality water for different purposes with, or without, specified additives.
We were told that competition in telephony could not work, that it was a natural monopoly because of the network of cables around the country. How wrong those defenders of monopoly were. Competition led to lower prices, the widespread adoption of radio technology to create rival mobile networks, and investment in a completely new fibre-optic cable network to replace the old and inadequate copper network of the monopolist. We went from being backward to being a market leader in phones. We went from a country struggling for every household to afford a single fixed line, to a country where most people now own mobiles.
Let the market loose in water, and something similar could happen. It will mean more jobs, lower prices, and better service – and it will be greener and cleaner.