The latest wet drought has highlighted the imperfections of our water industry, with its heavy regulations and government protected regional near monopolies. It takes some kind of genius to be short of water in an island famed for its heavy rainfall in many parts. It shows a lack of self awareness to be enforcing drought orders in the middle of one of the wettest springs on record.
I have long put the case for water competition. Why can’t we have a choice of water provider? Why do we have plenty of bread, but run out of water? Isn’t the main difference that competing farms grow the grain and competing bakeries bake the bread, whilst regional monopolies decide rationing is easier than supplying enough to meet demand for water?
The good news is the Coalition government has decided to introduce competition for all water supply to business. It is keen to allow water companies to buy and sell water across water company boundaries.
At present little of this happens. Under the complex regulatory system in place companies feel they are better rewarded for putting in new water gathering capacity of their own, than buying water from another part of the country where it is more plentiful and cheaper. They can offset the capital expense against the profits under the formula used for price calculations.
The government might also considering a Green Deal type scheme for water customers to invest in water gathering and supply facilities at their own home so they could supply some or all of their own water for grey water purposes. Customers taking such an option would be lent the money to put in the equipment, and be put onto water meters for their company supply which would cut their bills considerably as they used their own water for gardens, car washing and other low grade water activities. They would repay the loan for the water equipment over time, probably with their bills and loan repayments being lower than the old bills with full supply from the water company.
May 24, 2012
Firstly, more privatisation and competition won’t solve any problems unless the Regulator learns how to do a decent job. This seems to be true across all regulated industries.
When the water companies were privatised, they inherited an elderly, crumbling distribution system. However, this was still a massive asset – they could never have been formed if they had to build that infrastructure before starting to trade. The water companies claim that the age of the network is a liability, but in reality they have failed to look after this valuable gift properly.
I suggest that the regulator is allowed to charge (fine) the water companies to the amount of water that they leak. This fine is to be the retail value of the amount of water leaked away. Give them three or five years notice to sort out the existing backlog of repairs and upgrades, and make sure that the promised penalties are imposed fully.
It would also help the consumer if the fine is doubled for every day that a drought order has to be imposed. They would be rather less keen to impose those orders….
Once these principles are in place, you may well find that adding further (probably over-complicated) competition laws are not required. If they are still needed, at least it can be said that “we are all in this together”!
May 25, 2012
Indeed regulator are usually incompetent or quickly go native. Having too much contact with the industry. Just like MPs & Ministers who usually start to sound like bureaucrats rather quickly and govern mainly in the interests of the 20% who
work for the state sector after a short while. Rarely even coming into contract with the 80% who do not but have to pay for it all.
May 24, 2012
No competition and a poor and unintelligent system of water regulation. One that sets the wrong incentives to the supply and sewage companies. They have incentives to restrict use and ban hose pipes rather than invest in storage and efficiency measures.
The BBC this morning reported that legal aid in the UK cost 13 times the costs in Germany. The legal system in the UK is, surely to a very large degree, a racket for the enrichment of the legal profession and frequently fails completely to deliver anything but misery and injustice. Often amplifying any issue for enrichment of the profession.
Get the incentives in the system right for the interests of users for a change. The fewer lawyers the better for all is a good rule in general. Fewer levels of courts more certainty of outcome sensible balance of risks and severe restrictions and limits to recovery of costs are what is needed.
Heads you win tail you do not lose. but the lawyers always win, cannot be allowed to continue. Time for Ken Clark to do something useful for a change.
May 24, 2012
So growth, and particularly in construction, is even worse than thought. Hardly surprising given the the banks are pulling back all the development monies. With Natwest, RBS (government owned) leading the way. Still I suppose the government needs the cash to pay all the people made unemployed by the above policy, to pay the bloated state sector, the absurd expensive renewable energy grants and to throw billions to the PIGIS and the IMF.
It certainly seem to be working very well so far Cameron is it not?
May 24, 2012
How, for example today, can it cost £250,000 (for just one side’s legal costs) to decide on a simple and relatively trivial matter regarding Ms Trimingham (Chris Huhne’s friend) and the Daily Mail.
Not that I have much sympathy for her after all why did she bother? (etc)
May 24, 2012
When a woman of child bearing age goes for a job interview for example at the local supermarket. Maybe she could be asked her future plans for children? If she becomes pregnant by ‘accident’ I ask you. In this day and age? Within the agreed time frame then she should be fired as soon as she is unable to do the job. This would lead to much more jobs for woman especially in shop type work and act as an incentive to get back to work or even better stay at home. Obviously if the woman is unmarried then this is unnecessary as she could just be sacked. This would save a fortune on legal bills.
May 24, 2012
Firstly legal aid is usually only granted when suing the state or being for legal representation when accused of a criminal offence. It’s normally not available for cases involving private parties; which are encouraged to use no win, no fee solicitors.
Secondly if a case starts in the High Court, and doesn’t involve human rights or European law, it can only be appealed to the Court of Appeal and Supreme Court. 3 levels of courts isn’t excessive.
Thirdly damages awarded by the courts aren’t part of legal aid, so restricting them won’t reduce the legal aid bill.
Fourthly the main reason why the legal aid is so expensive is because hospitals are unwilling to admit fault and will keep appealing any case involving medical negligence because the cost of providing lifelong care for their victim is very high. Changing the law so hospitals have to admit fault would dramatically reduce the amount of legal aid needed, while having little effect on the cost of medical negligence.
Of course given the Government’s plan to involve more private companies in healthcare expect the court cases involving medical negligence to become much more drawn out.
May 24, 2012
Simple solution. Copy monetary policy.
We have a lack of money, we redefine what a pound is worth by printing more to stop the shortage and increase the supply which will lead to greater wealth.
If water company x produces a million gallons of water a day the government simply needs to redefine what a gallon is and then tomorrow it will be producing two million gallons a day, more than enough to go round.
We seem to believe this approach is going to work with money, why wouldn’t it with water?
May 24, 2012
The Canary Islands had a desalination plant in the 1970’s………..why can’t we? Surrounded by water & yet we aren’t doing anything about it except possible wind farms! There’ll be wars fought one day over the world’s most natural commodity – now’s our chance to spend money where it’s really needed – and who knows – we may even be able to export. I hear there’s a small investment similar to this idea in Hoxton, London and that’s precisely what is envisaged.
May 24, 2012
We do not even need to go to, energy intensive, desalination just better storage and transfers will do – which is far cheaper.
May 24, 2012
This shortage of water hypothesis is the cousin of Anthropogenic Global Warming . Perhaps even more tenuous .
Everyone should ask themselves why they are being conditioned to expect a shortage of water .
We have an entire financial services industry and energy industry which is predicated on shortages or fear of shortages . That is how they make their money .
What is supposed to be happening to water which would precipitate a shortage anyway ?
It’s not going up into space is it ? Or raining in a different part of the World ?
Desalination plants in the UK can surely only be yet another example of a pointless scheme set up solely to get hands on public money . They are not needed here .
May 24, 2012
Basically higher temperatures = more evaporation = less water in reservoirs and absorbed by the ground.
May 26, 2012
Basically higher temperatures (which have not, in any case, actually had for 14 years) would lead to more evaporation and thus more rain. Which is exactly what we need for more water. So that is good.
More water is needed because we have more people and people who want more baths, power showers and green gardens.
May 24, 2012
Singapore has a lovely one too – as has Dubai.
We, however, cannot because we are not in control of our water policy. That is done from Brussels.
May 24, 2012
How is desalinated water produced?
Reply: By squeezing salt water through a fine mesh filter to remove most of the salt.
May 24, 2012
Or by using waste heat and power from a power station it uses a lot of energy but still cost less than the rate the water companies charge people on the UK. But in the wet UK there are lots of far cheaper ways.
It is just that banning hose pipes seems to be the cheapest method at the moment.
May 24, 2012
This governments answer to everything is to put the onus on the customer. That’s not how businesses should be run (and these are private enterprises).
http://money.aol.co.uk/2012/03/14/water-firms-profit-during-hosepipe-ban/
“So where’s the money gone? Profits. The last available figures on water company profits from Ofwat – and it will no longer be compiling these figures (you’ll see why) – shows a staggering combined operating profit of £3.5bn in 2009-10, an increase of 7%. The companies’ pre-tax profits jumped from £1.8bn to £2.8bn – or up by 55%.
Total operating expenditure in 2009-10 was £3.7bn. Companies also invested £4.0bn in doing up the network of pipes and sewers, but that was 14.9% less than in 2008-09. Maintenance spend fell by 13% to £2.1bn and expenditure on improvements fell by 16.9% to £1.9bn”
GOD FORBID WE MAKE THEM PLOUGH THEIR PROFITS BACK INTO THE SYSTEM!
May 24, 2012
According to Christopher Booker in the Sunday Telegraph, the decision to cancel two reservoirs in Southern England was taken by the Coalition because of an EU directive to cut down on water usage within the EU. I think he said that Caroline Spelman took the decision for that reason.
I googled this and there is a whole page of EU directives on water which she no doubt was obeying.
May 24, 2012
Pity Christopher Booker didn’t try to save water by reducing the amount leaked by water companies.
May 26, 2012
If you reduce leakage it just goes into the sea down the river anyway- perhaps a small saving on pumping and purification I agree.
May 24, 2012
So how does this work ?
We have four sets of water pipes to each premise supplying water from different companies and we turn on only the pipe offering the best value ? Because all I can see otherwise is more and more tiers of bureaucratic structure – ever more confusing tariffs … more room for fiddles.
What of the water companies being able to draw water from the underground aquafers at no real cost to them but at huge cost to the environment ?
Some things are of far too great in national importance to be privatised.
We don’t want choice. We just want the essential things to work. We now know that privatisation is as wrought with problems as nationalisation and can but wonder what some of the nationalised industries would have made with today’s levels of subsidies.
You also forgot to mention the issue of mass immigration. Two million extra consumers in 10 years is a lot for any system to handle – especially when the policy was unannounced and the influx unexpected.
Reply: I have done the argument about population growth before. No, you do not need four pipes, but can have a choice of supplier through the pipes.
May 24, 2012
Re reply – but they are not selling you “their” water, are they?
May 24, 2012
Thanks for the reply, Mr Redwood.
Yes. You have done the argument about immigration before. The influx is still going on. 250,000 net immigration we hear today. So perhaps it’s time to do the argument again then.
2,500,000 more people by 2022 at present rates. That’s without including the birth rate and longevity. We simply cannot have an informed debate without mentioning this and we cannot expect the private sector to be able to plan for it until the Government tells us what the limit is going to be.
There IS going to be a limit, isn’t there ?
My point about the ‘four water pipes’ is that the market for water can never be as open as the supply of bread. They are incomparable.
May 27, 2012
Indeed it is 2,500,000 by 2012….the population is increasing at 0.7%+ per year….it doesn’t sound much but it’s enough for the population to double in just over a lifetime. The calculation is 70/0.7=100 years if anyone is interested in the mathematics. Google Professor Alfred R Bartlet. That assumes the present birth rate will remain static so the problem is even worse.
So far nothing is on the table that will stop this – the message to future generation is tough luck, get on with it. Prior to the 80’s we were a developed country with a stable population and rising living standards – the politicians have blighted our future by the negligence and stupidity.
May 24, 2012
I have had a water meter for nearly 30 years and we minority of about 40% of users pay possibly double those on fixed rates, who have no interest in minimising usage and cost.
Simple solution to create a useful jobs programme and encourage water conservation – all households must be water metered within 5 years.
May 24, 2012
A Sedgwick ,
I’ve yet to hear of anyone who went from unmetered to metered and did not better than halve there bill .
Wish I had got my meter fitted earlier . The best saving I’ve ever made .
Do you know people whose bills went up after fitting of a meter ?
They haven’t got a swimming pool have they ? 🙂
May 26, 2012
Live on your own Simon with no children? I do not believe anyone can save money with a water meter unless they live alone. Water meters are a scam to help the water companies make money. My water bill with a meter was £500 last year and thats not watering the garden much. Rates would be about £400 with no limit.
May 26, 2012
You do not seem to be concerned as to why you pay so much as. Only why people pay so much less than you unmetered. What does that tell you? Jobs? Water conservation? what planet are you on?
May 24, 2012
Remove all regulation, sack the bureaucrats and within a very few years there would be ample water for everybody. The same principle works for every aspect of government.
May 24, 2012
Didn’t work in 1929 when most regulations were removed from the stock market and it crashed.
May 24, 2012
All the problems lack of water and housing, pressure on all the public services, too much traffic etc stem from one major problem, overpopulation. The UK has too many people to cater for. As the public did not cause the UKs massive increase in population or for that matter request the Government of the time to privatize the water so that profits became more important than a good water supply, I see no reason why they should be expected to find or pay for the solutions. It is the Government that must make the effort to find the answers. Water shortage has been a problem for sometime in parts of England, yet the UK Government still allowed people to settle in areas that would potentially have water shortages.
The UK is becoming an embarrassment, interfering and spending money all over the World in an effort to keep some kind of World profile, in the meantime the Country is falling to bits around their ears. Get rid of the overseas aid department and invest that in the water system or make policy which would encourage people to live in areas where there is a better water supply, just stop expecting the British public to pay for the mistakes of Government.
May 24, 2012
Agreed, as others have said, over-population and recent immigration have not been properly planned. The social and infrastructure costs to deal with the increase are huge.
Immigration statistics have been released which claim that student numbers are falling, but let us see the net migration figures for 2012 at the end of the year……It will depend how many people leave the UK. Removal figures are down year on year, as are the numbers removed at ports of entry (substantially so)….
http://www.homeoffice.gov.uk/publications/science-research-statistics/research-statistics/immigration-asylum-research/immigration-q1-2012/removals-q1-2012
Zorro
May 24, 2012
It does not require much money for any household to set up its own water-gathering supplies. We have done it for years. We have a rain-barrel collecting run-off from the roof of our garden shed; we have another collecting water from the kitchen roof. In the garden there is a large 300-gallon barrel being integrated into the garden landscape, complete with gutter and rain-collecting roof; all designed by ourselves.
Even the goldfish tank water comes in useful, since every time their water is refreshed, the old stuff goes outside to water the plants.
It amazes me that, as a gardening nation (supposedly) there are so few rain-barrels outside people’s homes. An average 30 gallon barrel costs £30-£35 where I live. There are many novel ways of re-using/collecting water and British inventiveness ought to be out in front at this game.
May 24, 2012
Yes but water is only about £2 per M3 (0.2p a litre) including pumping pressure and disposal. If you collect then you have to pumps it, perhaps filter it, and the plastic of the barrels go brittle or freezes and crack and all your time that is wasted etc.
Best just to get a proper supply system working for all get the industry regulation in a form that works for a change and get some real competition. You should also pay less the more you buy like everything else!
May 24, 2012
Incentives for self-provision would be welcome, though I’m not sure a loan is necessarily a good way to go about that. I suspect one flaw in the current model is that supply companies don’t seem to face significant consequences for failing to deliver – have they been penalised in any way for imposing hosepipe bans in the midst of flooding, or just saved themselves the expense of providing the water they’re supposed to?
My small company has occasionally been cold-called about various water-saving approaches. Since there is no tap (it’s a one room office in a larger building, with shared facilities) – just a water meter, still reading 0 – savings would be difficult…
A spokesman from the National Grid hinted at the possibility of applying the same non-delivery mentality to electricity in future, rather than continue delivering the service we pay for. I hope we can get sufficient rebates in place for periods when the company fails to deliver to act as a strong deterrent to that attitude! Would they still have rushed to impose a hosepipe ban if it meant, say, a 25% cut in water charges for the affected customers, or magically have discovered they could provide the service properly after all?
May 24, 2012
While it is good news that more competition is being introduced to the water industry (how has it survived this long in its current form?), my point remains that you appear to be stubbornly ignoring. The bread industry is completely different from the water-into-your-house (water utility?) industry. It is similar to the bottled water industry, which has plenty of competition, and apart from unexpected hot spells, I don’t ever recall seeing a supermarket out of bottled water.
The fact that a water utility has to get that water into your house, hence has to make use of (and become monopolist of for some time via some agreement both with the network provider (monopolist also at least for a time) and the home owner) some pre-existing network of pipes into your house rather than a supermarket, means that the market operates in a very different manner to bottled water – more like rail companies or other utilities. Ideally competition would lead to water utilities operating as efficiently as bottled water companies or bread producers – but it won’t just happen by allowing more utilities to set up and get going, in all likelihood.
Reply: The householder owns and provides the pipe into the home. The water industry just has to supply the water.
May 24, 2012
It beats me how we privatise something as crucial as water* but keep nationalised vast amounts of government.
May 24, 2012
Good plan JR. I can remember when I were a lad int’ midlands mining village, most houses had a water butt connected to roof gutter down pipes. It was double filtered with one of granddad’s socks tied to the down pipe outlet into the butt; and, a piece of muslin stretched over a big ladle. Those were the days.
The water industry structure seems a bit strange! There are about ten combined water and sewage companies but there are about fourteen water supply only companies? How did that happen? When we were a nation with big thinkers in parliament, we built the 400kV Supergrid for electric and the NTS grid for the gas. I accept that water is heavy to shift around, but it will move under gravity and it will go over hills with a syphon. Thanks to our gas industry, we are very good a building pipelines. Shove austerity start spending on infrastructure.
May 24, 2012
Any organisation which commits itself to lowering consumption has an implied commitment to increasing prices.
A business that sells less has either to charge more, or to reduce its overheads, (and there is no incentive for a monopoly to increase efficiency).
This principle also applies to every area where Government institutes taxation or charges to change behaviour or reduce consumption.
Fuel tax has to rise as cars become more efficient in response to high taxation and motorists reduce their mileage.
Congestion charges have to rise as motorists change to smaller more efficient vehicles that attract a lower rate of charge, and also reduce their mileage in the charge zone.
The revenue from tobacco and alcohol tax has to be replaced as people reduce their consumption in response to taxation.
The utilities have to increase the cost of electricity and water as price driven effiiciencies reduce consumption.
The consumer cannot win and is being motivated like a donkey propelled forward by the attraction of a carrot tied to the end of a stick.
May 24, 2012
I read elsewhere that the EU was discouraging the building of new reservoirs on the “green” basis that we should all use less water. Is this true? Certainly it seems that proposals for Thames Water to build a new reservoir in Berkshire were blocked.
Is the water shortage all the water companies’ fault?
May 24, 2012
I suspect it is indeed government inspired drought to help the green religion.
I remember the BBC going on about drought resistant plants for the new global warming era just before the last deluge in July 2007 – “Gloucestershire experienced the worst floods on record said the BBC” a week or two later. No compensation was offered by the BBC for the people who had their new drought resistant plants all drowned as I recall!
Anyway warmer usually means more rain not less.
May 24, 2012
No. Like the High Speed Train and like the Wind Farms, it is entirely the work of Brussels.
That is why all the comments above are irrelevant.
Reply: it’s not entirely the result of Brussels. As with much modern government it is complex interplay between national and EU government where getting the truth about who did what is very difficult.
May 24, 2012
Re reply, which is another dam good reason for getting out of the EU!
May 24, 2012
John, unfortunately, we are being lied to –
– Several plans for new reservoirs have been cancelled over the last 10 years, mainly by Labour, but also by the coalition
– Over the last 10 years the population in SW England has increased by 10%, from immigration
– The EU has mandated that consumption should be restricted, not capacity increased for resources, ie. water, power, etc.
– Water consumption by consumers is 8%, the other 92% is taken by irrigation, manufacturing and utilities and leaks
We are being threatened by shortages and told how bad we are to be thoughtless, greedy consumers, meanwhile the whole ‘shortage’ has been engineered, and I predict the bottom line will be that the price of water is steeply increased.
If you want a precedent, remember Enron and the intentional blackouts of California in 2000 / 2001.
May 24, 2012
You are quite right that we are being lied to but who is aiding and abetting the lies? John is fully aware of all of the above but fails to mention it in the article even though it is the single biggest reason behind the problems he describes. The policy is to create deliberate shortages of one of the few things we have in abundance and to force up the price. all in the name of restricting usage and “decarbonisation”. His government slavishly follows these directives and couches everything in a web of spin to hide the real agenda and the EU involvement. Naturally, you can rely on the “prominent Eurosceptic” John to kick up a fuss about this – not.
May 24, 2012
I like these two articles because they are true.
May 24, 2012
There is absolutely no reason why this sort of “competition” should work for water companies when it has clearly failed for electricity companies.
Water is a utility that we all need and all pay for. The infrastructure is in existence and just needs to be replaced and improved upon.
It is not a growth business nor is it a business with great risk and,, as such the regulator should, in the absence of proper competiton, exceptionally force the companies to make no more than a pedestrian return on funds invested whilst ensuring the quality of the infrastructure is at a level that will not result in shortages.
Failure to do this should be met with swingeing fines that should be used exclusively to employ outside cxontractors to do the job for them.
Fake competition might fool some of the people for some of the time, but not for long
May 24, 2012
There are a number of problems with transporting water across boundaries that have to be considered.
1) The costs of pumping treated water over even reasonable distances is excessive.
2) The biological consequences of transfering untreated water between catchments is potentially horific. Wildlife is currently restrained by catchment boundaries. These restraints cannot be broken.
3) The economics of more than one utility company being able to deliver to a household company depend on their source being connected by a shared network. In the case of water for the reasons explained above the sources and delivery systems have to be kept distinct and cannot be shared.
May 24, 2012
Our water used to be recycled. There was an understanding that that our drinking water have been through seven people before us. And we used grey water to flush our loos. Does this happen any more? Probably not now the EU is in control of our water and their Directives dictate that evening drinking water is flushed down the loo. How wasteful is this? This is absolutely stupid and unnecessary and should be stopped. Then we would have ample water as we used to have years ago before the EU took control.
May 24, 2012
Vanessa ,
I don’t remember using grey water for flushing the loo .
As you know in France there is a potable supply and non-potable .
As a nation Britain has unfortunately become very wasteful .
It was not like this in the 1970’s , perhaps because our parents experienced rationing during and after WW2 and our grandparents the great depression .
The last time there was an official “Save it” campaign that I noticed was also in the mid 1970’s .
Britains wastefulness cannot be blamed on the EU or even Westminster .
I think it stems from bad education , bad parenting and a pre-packed isolation from the sharp end ; industry , nature and the slaughtering of animals for food before the skin and bones have been removed .
21st century Britain should learn from the real austerity during parts of the 20th century .
May 24, 2012
Instead of depleting beautiful streams by extraction near source why can’t they take the stuff near the estuaries which nobody would notice? It’s criminal what has been done to streams in Hertfordshire and Essex that when I was a boy flowed freely with heads of trout. A few more local water pipes from the coast back, and not the other way round, can hardly be a big deal, not in the circumstances anyway. If the water near the estuary needs more purification then so be it but running out altogether is preposterous. And while we are at it why do cars need washing?
May 24, 2012
“And while we are at it why do cars need washing?”
It helps to keep them streamlined.
May 24, 2012
Are you going to pay for the extra cost of pumping the water back from the estuary? This would far exceed the cost of any extra cleaning. Most of our water is delivered by gravity with at worst a little pumping into water towers to improve the pressure.
May 24, 2012
You may be right that pumping would be expensive but droughts are expensive too not to mention crazy and I reckon a few of us would happily pay any extra. Please notice the word “local” in my effort–I am not talking huge distances and any easy, expensive or otherwise, mitigation of the present position in terms of water being made available even if only relatively close to the end rather than the beginning of rivers (personally I don’t think much of the competition idea) seems worth consideration to me.
May 24, 2012
Does JR’s Green Deal scheme go far enough? I think not. In order to save the need for contructing reservoirs thereby propiating the Green god whose cardinals reside in Brussels, there should be active encouragement for private individuals to harvest water for the public good. Water could be collected from rooftops into water butts which would then be pumped, powered by electricity generated at the same time from photovoltaic cells, into the mains water supply. Those with gardens, still better, those with large estates could sink wells in their land and lift the water using windmills and pump the water into the mains supply. Of course, of itself, all this would be grossly uneconomic. But that is the old way at assessing the viability of projects because there is a simple solution to that: why not heavily subsidise these operations (the Chinese would love to supply us with large quantities of windmills and pumping equipment), putting the costs onto water consumers whilst rewarding handsomely those who by their selfless actions are helping to save the planet?
May 24, 2012
It is of no use sinking wells into your gardens if the aquifers are half empty. As for pumping water from butts into the mains, there are many problems. Purification of the water gathered from a house roof would be a major problem it can really only be used as grey water for the garden or flushing the loo. The amount of energy needed to create the pressure needed to pump the water into the mains wouls be excessive.
May 25, 2012
Technological problems can be overcome; once you accept the premise that harvesting natural resources does not need to be economic as long as it is ‘sustainable’, there is really no limit to what may achieved so long as the masses keep voting for increasing their utility billsi.
May 24, 2012
I appreciate the need to build more resevoirs and/or move water round the country, both of which require significant investment.
How would competition work? If a business in the usual catchment area of water company A wanted to buy water fron water company B, would that not in some way necessitate cooperation (and perhaps investment) by water company A? If so, then surely the competition would be limited.
With gas, there was a monopoly wholesale supplier (TRANSCO?). The nature of the competition between the various companies buying from TRANSCO lay in (a) the nature of their gas purchase contracts with TRANSCO (which affect price) and (b) the efficiency of their retail and billing operations. Has that changed?
Perhaps with water we need a structure with elements of the gas arrangements. That is a national water company that responds to the demands of water companies, who in turn respond to the demands of customers.
May 24, 2012
I set up a water butt to collect the rainwater off a small shed – 6 x 4, one half of the roof only, and it was full within a couple of weeks. Amazing. Is there a real shortage of water? Surely water evaporates from the sea, falls as rain, and eventually one way or another, finds its way back to the sea and the cycle starts again. Is it not to all intents and purposes a closed system, or am I missing something (genuine question not sarcasm).
May 24, 2012
The solution would be to leave the EU and then decide on our own water policy.
It’s too important to be trusted to the EU nomenklatura.
May 24, 2012
I totally agree.
But why does everyone obscure the fact that the EU is responsible for this disastrous policy?
May 24, 2012
Because if the truth was known the state would be worried about the reaction of the people and ask what is the point of Parliament?….The politicians here might also be worried about losing their jobs. Even John hasn’t mentioned the EU strictures in his post…..I don’t know why not.
zorro
May 25, 2012
Mike
I would think Mike that it is because the UK Government agrees with the policy.
May 24, 2012
Whilst donning my “tin foil headgear”, my perception is that there are no actual shortages of these items (water/energy) in this country, however the providers of same require to run businesses which make profits. If you have a full capacity of an item and the customer knows this, then the price they are willing to pay is affected. If the item is perceived as rare or in short supply the price goes up. If DeBoers released all their stock of diamonds at once, what would the price of shiny rocks actually be? If there were a multitude of full reservoirs and no leaks then it would be difficult to enforce bans and price increases. Another poster mentioned the EU aspect which has been explored by Dr North with references on his website. I have read a spiegel article about German green failures and one concerns water, apparently they have a saving water policy as mentioned previously, but in some cities now they have problems with sewer smells and health problems due to the lack of flow through the system due to over conservation. It has been revealed that to prevent this, the water companies actually route flow through systems to flush them thereby wasting large amounts of water (another unintended green consequence).
May 25, 2012
@DaveK
I have not heard of this Dr North. Please would you be kind enough to provide a link to the relevant page(s) on his website.
May 26, 2012
Richard North moved to a new site last month, called EU Referendum. Can’t provide a link I am afraid.
May 27, 2012
Thanks, Mike. His new site is can be found by clicking here
May 24, 2012
Link to speigel article:
http://www.spiegel.de/international/business/germany-s-environmental-protection-policies-fail-to-achieve-goals-a-821396-3.html
May 24, 2012
We hear yet another EU regulation over the control of water to reservoirs cannot be built – who on earth signed this piece of treaty/regulation?
I’m afraid the govt needs to go through line by line all the regs/treaties that have been signed transferring powers to the EU and pull them back in.
Easy solution for long transportation of water, CANALs.
May 24, 2012
Most of the water inour canals has to be pumped to the top of the hill. Transferring water untreated between catchments creates major biological problems.
Our problems this year was not a shortage of reservoirs but a shortage of water to put into the reservoirs. Even after all the rain we had in April many of them are only two thirds full in the South East. The real problem is the ground water in the aquafers that supply well over half our water. These are half empty and will not be recharged to any extent by spring or summer rain.
May 24, 2012
The aquifers would not be so empty if there was less abstraction higher up and, if there were more reservoirs (as there used to be–smaller ones having been shut down to save money, I don’t think) even if only “two thirds full” that would be extra water would it not? I don’t buy the “biological problems”–the biology will just have to adjust so far as I am concerned. The Romans with their wonderful aqueducts across wide valleys (“from one catchment to another”) I suspect didn’t worry too much about such modern sophistry and many are still functioning. Indeed I suspect they didn’t worry about the cost at all (never mind competition about costs) instead regarding free flowing water as being too fundamental to worry about bean counting. No doubt Brussels has a whole department of Jobsworths on this coming up with the wrong answers as usual. Back to aquifers, has anyone thought that the universally calumniated “leaks” help keep aquifers full(er)?
May 24, 2012
Bank of Russia just leaked out Greece as plan for paralle currency – presumably to pay civil servants – you’ll have to dig my old posts out – but … told you.
May 24, 2012
Indeed very likely.
May 24, 2012
The long-term strategy should be to create private water-companies within a national distribution network; and to allow customers to choose their supplier according to whatever quality-criteria each customer values highest.
The current system is an example of everything that’s wrong with this country’s approach to customer service, namely that a customer who demands excellence in return for his/her money is a nuisance, or worse.
I don’t want my friends to visit me in a country where hose-pipe bans compete with floods for headline news. The words “laughing-stock” are appropriate, but wholly uncomfortable.
May 24, 2012
Is there any chance you could leave things just as they are for those of us who are completely happy with things?
Reply: I am offering additional choice – you don’t have to take it up.
May 24, 2012
Those kind people over in Brussels put this out for our benefit, an idiots guide as to how they are screwing us:
“Summaries of EU legislation”: everything you want to know about European legislation.
http://europa.eu/legislation_summaries/index_en.htm
Surely its not beyond the capability of the water companies to charter some of the laid up vlcc ships to store water from the northern area of the kingdom who have a large surplus of the comodity, then pump it ashore as required in the southern drought areas.
Its not as if there is a shortage of these vessels:
http://www.intertanko.com/News-Desk/Tanker-news/First-VLCC-to-cold-lay-up–Financial-Times/
May 24, 2012
Unfortunately John I’m not with you on this one and I think your agruement does not stack up. There are two basic problems with our water supply:
1. We only capture a fraction of the rainfall which falls on the UK. The figure I was given was 4%.
2. Privatisation of the water companies by previous Conservative governments has meant that in a drive to meet shareholder expectations numerous assets such as reservoirs, treatment facilities etc have been closed, mothballed or sold off.
Until we tackle those fundamental issues we can not reorganise.
May 24, 2012
EU can not do without the UK.
UK is important due to its size but also as a balance to FR, IT and ES.
May 24, 2012
The EU did fine before the UK joined and will do fine without the UK.
May 24, 2012
What business is it of the EU as to how much water we consume!!!
If Spelman signed up to this then it demonstrates a craven attitude to daft ideas.
May 24, 2012
Just allow the water companies to charge what they like for water this would then choke of demand and increase profits. The rich could use what they like as it will still be cheap and the great unwashed could stay unwashed. If you can’t luxury suit then you have a cheaper one or take a thread from everybody else until you have one. Lets face it none will die of thirst if public drinking fountains are reintroduced.
I’ll write a report on this problem if you like John and you could put it forward. I’m sure many Conservative supporters, MP’s and contributors will agree with it. Vince Cable and the rest of the crackpot Socialists can ram it.
May 24, 2012
Don’t forget about removing all regulations so that the markets will be free to decide how much water is worth. According to most commentators on this blog being at the mercy of the markets is the best way to manage everything.
May 24, 2012
Taxes on bottled water and rain collection equipment would obviously need to be increased too. Like taking water into rock concert. Could be dangerous H&S an all that.
May 25, 2012
uanime5
Privatization can be a good thing but in the case of water it is not. Some things should remain publicly owned and this is one of them.
When water was privatized the outcome was the creation of what is effectively private monopolies without competition. The terms were also far too generous. This has resulted in excessive prices, profits and poor performance by these monopolies.
It seems the Government is now trying to deal with this mistake by saying they will introduce competition but as I say in my other post I do not think they can. Having made the time and gone back to read the article on water privatization, I read sometime ago, the Government would have to pay 25 years of profits in compensation or the new company would have to wait for 25 years to take it over if they won the tender according to this article.
May 24, 2012
I like bread. I buy quite a lot.
Within easy walking distance there is the supermarket with its range of breads, the traditional small, local baker with a different range of breads and an even smaller artisan baker with yet more variety from which to choose. Further, the early-to-late shop has bread, and I can even buy bread from the butcher.
So I am spoilt for choice as to the product, the price and the sales outlet. I choose as I wish. It works very well.
I do not see a meaningful comparison with buying an identical product from the same outlet where any price difference must necessarily trend to zero.
May 24, 2012
Mr. Redwood, I seem to remember reading an article not so long ago about water privatization. At the time of the privatization it said companies were awarded 25 year contracts. I am sure it said that not so long ago the water companies realised the danger of competition being considered once these contracts were up. They therefore had their licences adjusted through Government. This entitled them to a 25 year notice period. So that if competitive tendering was introduced and another company won it, they would have to wait 25 years to take it over or the Government would have to pay 25 years of profits as compensation.
Is this correct?
May 24, 2012
With the greatest of respect to Mr Redwood, I believe obsession with privatisation has clouded his judgement. The provision of water has little to do with provision of bread or milk – the arguments for privatisation cannot be shoe horned onto the water supply industry.
Certain customers cannot help themselves to as much bread as they want and incur no extra charge. Customers do not want to eat more bread when there is a poor wheat harvest. The cost of building more bakeries isn’t out of all proportion to the extra revenue generated. A baker isn’t required to have spare ‘buffer’ bakery capacity sat idle for much of the time when bread stocks are high. The baker can force a customer to pay for his bread if he steals it or refuse to supply the customer with bread.
Bread can be moved around freely – water cannot be moved to London easily it is drier than some deserts.
Water water everywhere (but Mr Redwood well knows the coalition has failed miserably to bring down net migration to under 250,000 as the latest figures show). Effort is being wasted on a futile attempt to increase water storage capacity that would be better spent pressing for sustainable levels of migration.
May 25, 2012
If this plan went ahead we would have the absurd situation (we have with electricity supply ) of gas and electric company’s supplying water from exactly the same network. The consumer would have the task of switching every week from generous introduction tariffs to get the best deal. To achieve genuine competition, company’s would have to install their own supply network which is absurd.
We need to use and run the existing network properly and not pretend that privatisation is some kind of magic bullet. We also need politicians with the sense and courage to set migration levels to match resources and not pursue the fantasy that resources can keep pace with rising demand.
May 25, 2012
[…] Water water everywhere, but not enough to drink? […]
May 15, 2013
Last week the government announced plans for households to spend nearly 100
a year subsidising pv cell lifetimes and nuclear options together.