Water,water everywhere – but dear to drink?

The political parties are now descending on the water industry.It’s a race to be the toughest, after the battle of the energy companies over the last few weeks. The red corner has told us to expect water industry menaces soon. The blue corner has got their retaliation in first, with a letter to the industry telling them to tread carefully when it comes to price changes this winter.

You should not need this degree of political concern about prices. We do not have sharp exchanges on bread prices in the Commons, so why do we need them on water? The answer is simple. The water industry does not benefit from competition.

Some competition has been introduced in Scotland for water supplied to business. It all passed off peacefully. The worst fears of the critics were confounded. There was no interruption to supply. The taps stayed on. The best hopes of advocates were not realised either. Prices did not tumble, though they came down a little. Businesses on the whole approved. They said they got a better service as they could always switch supplier now if they were not looked after.

Usually when you introduce competition to an industry that has not enjoyed it, prices fall, quality rises, and innovation comes to the party. More of all of those would probably have happened in Scotland if the whole industry had been open to challenge, rather than just the accounts of some big businesses. The shock to the water industry was modest as the area for competition was modest.

If the political parties are serious about getting a better deal for English consumers they should go ahead an allow competition throughout the industry. Water is no natural monopoloy. It falls from the skies on all of us. The business task is to harvest enough of this plentiful and renewable resource, and clean it to the appropriate standard for its users.

We debated all this yesterday in the Commons. I will post my speech when it is available in Hansard.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

81 Comments

  1. Arschloch
    Posted November 6, 2013 at 6:10 am | Permalink

    OK then if competition is the panacea why am I being screwed relentlessly by the energy companies? There is plenty to chose from there. However when I go on the price comparison websites the savings in changing provider I can make are peanuts and make me think I have wasted my time bothering. Competition “yes” but make sure you do not end up with a cartel and that an effective regulator is in place

    • outsider
      Posted November 6, 2013 at 2:59 pm | Permalink

      Dear Arschlock,
      Mr Redwood neglected to mention that the water industry in Scotland is nationalised, unlike England and Wales. The state company Scottish Water collects and purifies the water, delivers it to connected premises by pipe and takes it away in sewage pipes and then cleans it up. All this, along with supply to households, is a state monopoly, with the state taking all the risks of investment. That is why very limited competition for business customers can work. The private companies buy all these services from the state and just package deals for business consumers. Households are specifically excluded.

      As you say, if this system applied in England, it would be just like the electricity market, where the generators have an incentive to keep supplies short and avoid investment. There would be no incentive to invest in extra water sources or sewerage and the cost of doing so would be much higher. The companies would have to take the price risk and the cost of finance would be much higher to reflect this. We have just seen how this ends up with the nuclear deal guaranteeing the French state company a special, extraordinarily high minimum price to persuade it and its Chinese partners to invest.
      So essentially, Mr Redwood seems to be saying that water privatisation was a big mistake and all the infrastructure side and all the processing should have remained under state ownership. Personally, I think Nicholas Ridley, who thought the issues through very carefully, got it right.

      Reply You ascribe to me the opposite of my view. I want a fully private competitive industry.

      • Denis Cooper
        Posted November 6, 2013 at 6:06 pm | Permalink

        “That is why very limited competition for business customers can work. The private companies buy all these services from the state and just package deals for business consumers.”

        Is that all it amounts to?

      • outsider
        Posted November 6, 2013 at 6:15 pm | Permalink

        Dear Mr Redwood, Forgive me for being old-fashioned but “a fully private competitive industry” implies to me that there are no price or investment controls, let alone a regulator deciding both of them, and that supply is only evoked if the producer thinks it is worthwhile (as in bread, shoes or plumbing services).
        For the water industry to be competitive there would therefore need to be a network of independently owned reservoirs and treatment plants in each region (there being little infrastructure to move water between regions). There would also need to be a minimum of two competing networks of supply and sewerage pipes. After all, bread would not be very competitive if bakers all had to buy wheat from the same supplier and bake it in the same ovens.
        Suppliers would either be free to set their own prices and suffer the consequences or all water would have to pass through a complex wholesale market (fob or cif?) in which case there would pretty obviously be a wide seasonal variation in prices and sharp variations according to rainfall, with the likelihood of many people being priced out during dry summers.
        I do not believe that is anything like what you want. Rather you are looking for even more detailed price regulation at different stages of the process in order shoehorn a tiny bit of competition into the middle.
        The Scottish authorities proudly claim that they are the first in the world to introduce free competition at the retail end, albeit solely for non-domestic users. It seems to me that this “first” depends on the other 90-95? per cent being state owned. That is why I suggested that you implied that all the capital elements of the industry should have remained nationalised.

        Reply New networks and technology may emerge as in telephone services. The first step is to create the pipe system as a regulated common carrier, with competition for all the rest.

        • Denis Cooper
          Posted November 7, 2013 at 9:43 am | Permalink

          You’ll have to flesh this out a bit more, JR, if you want to convince people that it’s a good idea.

          For a start, how many mains water pipes would come into my house?

          If it was just one, as now, then I could choose between companies competing at the margins of alternative tariffs and administrative efficiency and billing methods and possibly availability of advice on how to reduce my usage, all things which my present supplier could do anyway, but I would still get the same water through the same pipe from the same mains distribution system.

          That doesn’t matter for the electricity which comes down the single mains connection to my house, or the gas which comes down the single mains connection to my house, because there are no similar issues of the quality of what is supplied; it does matter for telephone connections and especially for the internet, but in that case it has always been necessary to have a complex system of switching and so it is relatively easy for a company to offer an alternative and higher quality internet service.

          On the other hand if I wanted a piped supply of the better quality water on offer from an alternative company, they could only supply it by connecting my house to their own mains distribution system running right back to its origin.

          Reply Under my system there would be three choices – new supplier using old supplier’s pipes to your gate (the pipes in your garden are yours anyway), new supplier using own pipes, new supplier helping you collect your own water.

          • Denis Cooper
            Posted November 7, 2013 at 7:12 pm | Permalink

            But if it was using the old supplier’s pipes it would be the same water as before: so there could be no competition on quality, only on marginal differences in price.

    • Mark
      Posted November 7, 2013 at 11:50 am | Permalink

      We do not have a competitive energy market. Energy suppliers are heavily constrained by regulation that prevents them from selecting the cheapest, most reliable sources of supply, and instead are required to fund expensive and unreliable alternatives, while closing their existing plants that can supply cheap and reliable power.

  2. Mark B
    Posted November 6, 2013 at 7:08 am | Permalink

    John Redwood MP said;
    “If the political parties are serious about getting a better deal for English consumers . . .”

    Well its nice to know at least one MP recognizes the ‘English’. Although asking a bunch of MP’s from Scotland, Wales and N.Ireland to us a favour is a little hopeful. I mean, whatever they decide, its not going to affect them or their constituents, is it ?

    As for saying it’s all down to lack of competition, well you may have a point. But I would also state that poor regulation and the fact that water is an vital commodity, and whilst I am of the view that many former state business benefit from privatization, I do not think water has. Electricity can come from any part of the country or continent. It can be produced at a flick of switch. Water however, cannot ! It is the one thing that really does not lend itself to privatization. Even in your piece, Scottish business have only marginally benefited from competition.

    I would argue that water company ownership needs a different model. Not State owned, but not private either. I think it should be run along the lines of a co-operative. Disgustingly Socialist I know, but frankly, I can see no other way.

    When the water companies are owned by the people that run them (similar to say John Lewis) and their profits and various financial packages are kept in check, I think we will get a better deal.

    Also, Government needs to get out of the way and allow the building of more and bigger reservoirs in order to cope the increase in the population due to mass-immigration into the UK from the EU and Non-EU countries.

    Reply Are you happy with the way the Co-op Bank has gone?

    • Max Dunbar
      Posted November 6, 2013 at 2:26 pm | Permalink

      My experience of Scottish Water is not good. They take months to get round to doing simple straightforward jobs and charge in proportion to Council Tax banding. It’s a complete rip-off.
      At present I have private water and sewerage. It is organised by an efficiently run elected committee and our charges are a fraction of the Scottish Water rates. Our association has 20 units. The charges have remained the same for some time and we have a contingency fund. We maintain control over the catchment area and storage/pipework system. The water tastes excellent.
      We do not want to have anything to do with Scottish Water ever.
      Unfortunately, we still have to pay council tax and we get virtually nothing in return. Our bins are emptied even less frequently now due to idiotic politically motivated ‘green’ initiatives.

    • Mark B
      Posted November 6, 2013 at 7:26 pm | Permalink

      I don’t care, its in a competitive market place and is subject to the rules and market conditions. If there has been a failing in the management of the company then, I say those responsible should be held to account. Personal and collective responsibility.

      You are asking me to compare apple’s to orange’s. Co-op to Water. The two are not the same and your comparison is poor. Please feel free to suggest another/better one.

  3. lifelogic
    Posted November 6, 2013 at 7:24 am | Permalink

    Competition in water distribution is not so easy. Competition, where it can be achieved, would be most welcome. Large users should clearly pay less for water than small users, after all there is no shortage in the UK. This despite the water shortage guff that the greens and the BBC constantly come out with.

    They would prefer it to run directly into the sea, totally unused, one assumes.

    • lifelogic
      Posted November 6, 2013 at 10:29 am | Permalink

      One could, of course, through intelligent regulation create a system which mimicked competition and made a single water company improve its services, costs and lowered its prices consistently. In some ways this could be far better as it would have more efficiencies of scale, lower advertising, billing and sales costs.

      Alas we would need honest, clever and competent regulators without any dumb political interference – which is unlikely but then for competition in something like water we need good regulation anyway. It is a shame we can never get this.

      • Alte Fritz
        Posted November 6, 2013 at 2:44 pm | Permalink

        “intelligent regulation”…

        yes, an oxymoron?

        • lifelogic
          Posted November 6, 2013 at 5:43 pm | Permalink

          True rather like an simple, efficient, fair legal system or a simple fair and efficient tax system!

          Buy they are surely possible if the structures and incentives in place are right. Certainly one can imagine framing such structures that could be made to work well. Clearly it is beyond politicians though.

          In the legal system, the incentives are that the system should be as slow, inefficient, multi-level, arbitrary, random outcomes later over ruled and with perverse incentives, lots of legal aid and should be as expensive as possible. So as many are forced into length, expensive legal actions as possible.

          So that is exactly what we get as that is clearly best for the lawyers who largely construct the system.

      • Leslie Singleton
        Posted November 6, 2013 at 6:02 pm | Permalink

        lifelogic–True unfettered competition where it is possible is one thing and heartily to be supported but the kind where a small (of necessity) amount of (artificial) competition is forced in to place is something else. Personally I think the system we now have eg on the Railways is laughable. The problem with State ownership (in the right place) is not so much the lack of competition but the power of the Unions. Remember Michael Foot saying that only the miners could extract the coal so they should be able to be paid what they want. It wouldn’t be so bad if the Unions operated in the workers’ interests. Look what the NUM did to the miners. Look what Unite nearly did to Grangemouth, nearly destroying what were very good livelihoods (average £55,000 a year!!) almost on a whim. I doubt many at Grangemouth had individually the slightest sympathy with what has gone on. How best to get the ordinary decent workers more involved is THE problem.

        • Leslie Singleton
          Posted November 7, 2013 at 9:27 am | Permalink

          Postscript–Having just learnt about Portsmouth I wonder if anything meaningful by and for the real workers was ever tried. Was for instance a say 10% pay cut ever considered? I do not know the details but would hazard a guess that, further to my effort above, a majority of the actual real workers at Portsmouth would rather have had a 10% pay cut than no job at all, but there seems no mechanism for the workers even to begin to fight for their jobs in this and similar ways or even to consider doing so. 90% of a loaf is better than none–hugely so if you ask me at a time of redundancy. It is BTW far from just an intra UK issue because orders from abroad clearly could not be won as things stand–they couldn’t possible expect just British orders, especially of enormous carriers, to sustain them. The likes of Unite might have a role to play against a strong (nasty) profitable employer (and their “faceless directors” as McKluskey so glibly calls them) but seem useless, even (very) counterproductive when the employer is on the brink.

        • lifelogic
          Posted November 7, 2013 at 4:51 pm | Permalink

          Indeed the unions are another very good reason for cars and truck over trains and the mad HS2 project.

  4. matthu
    Posted November 6, 2013 at 7:28 am | Permalink

    I heard Charlie Elphicke, Conservative MP for Dover (I think it was) talking on LBC about how he asked Thames Water why Londoners were being obliged to install smart water meters when there was no water shortage in London and the investment could perhaps be better directed at fixing leaks. Thames water apparently had no answer.

    But at no time was the EU’s involvement mentioned at all.

    Is there some government conspiracy to conceal the role that the EU plays? Parallels here with the green taxes concealed in your energy bills. I have heard there is some EU rule that unpopular measures are never to be blamed on the EU …

    Another opportunity for Conservative party MPs to come clean here?

    • Acorn
      Posted November 6, 2013 at 9:28 am | Permalink

      JR missed a trick in his post today, a chance to blame the EU, the EU Water Framework Directive. Designed to reduce water consumption significantly across the EU. I think we have the second most expensive water in the EU behind Denmark; circa £3 m3.

      Economists decided a while back that water is a natural monopoly. Mainly because it is heavy and the infrastructure to move it around and process it; suitable to be put back into the rivers you took it out of, is expensive.

    • Peter van Leeuwen
      Posted November 6, 2013 at 10:00 am | Permalink

      @matthu: Not quite as you suspect: A recent “citizen’s initiative” by over a million EU citizens has forced the European Commission to abort its proposal for EU wide privatising “water”. A bottom up “red card”. This is too late for the UK or for the Netherlands, where water supply has been privatised, but it does bring into focus that water is an essential provision (there is a UN “human right” to water).
      When the article above states: “Water is no natural monopoly. It falls from the skies on all of us”, I find that a rather dangerous argument. “Air” doesn’t even have to fall down to be all around us. Does that imply that the provision of air would ever be prone to privatisation??

      Reply Of course not – just as the water that falls from heaven is free for us to use if we can collect it. Private companeis do make money out of processing air and selling gases.

      • Denis Cooper
        Posted November 6, 2013 at 2:46 pm | Permalink

        “A recent “citizen’s initiative” by over a million EU citizens has forced the European Commission to abort its proposal for EU wide privatising “water”. A bottom up “red card”. ”

        Perhaps you could explain how any such petition could have “forced” the European Commission to “abort its proposal”?

        From Article 11 TEU:

        “4. Not less than one million citizens who are nationals of a significant number of Member States may take the initiative of inviting the European Commission, within the framework of its powers, to submit any appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Treaties.”

        So how has this mechanism for people to invite the European Commission to put forward a new proposal become a mechanism to force the European Commission to abort one of its own proposals?

        And on the matter of differently coloured cards, do you have any further information on the decision of the European Commission to simply ignore an unwelcome “yellow card” last week?

        http://euobserver.com/justice/121959

        “National parliaments opposed to creating an EU-wide prosecutor want the European Commission to rework its flagship proposal, but EU officials say it is likely to go ahead.

        Chambers in 11 national parliaments got enough votes to trigger a so-called “yellow card” procedure when they filed their complaints to Brussels earlier this week.”

        “An EU official told this website that: “Formally, the number of votes was reached to trigger the yellow card procedure.”

        But they added: “It is the commission that decides if there has been a yellow card or not and what would be the consequences.””

        It’s all twaddle, Peter, however you try to dress it up.

  5. Anonymous
    Posted November 6, 2013 at 7:42 am | Permalink

    It astonishes me how hot, dry countries such as Cyprus can have water rates far lower than ours.

    What on earth is going on ?

    • lifelogic
      Posted November 6, 2013 at 10:34 am | Permalink

      EU over regulation, inefficient companies and poor regulation. There is no real shortage of water in the UK just storage capacity shortage, not even really worth metering for most normal small domestic users the costs often exceed the advantages.

      • Anonymous
        Posted November 6, 2013 at 1:38 pm | Permalink

        Lifelogic: There is also the issue of foreign (unpatriotic) control of strategic resources. Did the Tories not think about this when they privatised ?

        People feel – rightly – that, yet again, they are being shafted by privatised industries.

        You’re darn right that there is no shortage of fresh water in the UK. It must be one of the most abundantly and naturally resourced countries on the planet; we are always complaining about the rain and we put up with yearly flooding to the point that our household insurances are rocketing, and yet here we are, paying more than desert countries for our water.

  6. Mike Stallard
    Posted November 6, 2013 at 7:45 am | Permalink

    One of the worst schools in which I have ever taught was composed of boys and girls who were perfect. Whenever something awful happened – again – they would look me straight in the eye and then say, with a smirk, “Wan’t me, it W’z ‘I’m”.

    The government, especially the Labour Party are now being just as cowardly. Why can’t they own up? Ridiculous taxes used to bribe us. Stupid Global Warming windmills. Totally ridiculous spending on HS2 and aircraft carriers which we all know we cannot afford. I could go on.

    Man up! Take the blame! Do something about the real causes of our present decline! (Hint: Remember the Debt? Or the Deficit?)

    • alan jutson
      Posted November 6, 2013 at 1:18 pm | Permalink

      Sounds like your getting frustrated Mike.

      Join the rest of us.

      Such simple questions, but alas no simple answers from those in charge.

      Just ask yourself what would be the perfect business ?.

      Raw materials for free.
      A product that everyone has to have.
      A service which has no competition.
      A service where payment is demanded by law.
      A service where storage is in the open air
      A service where delivery is by a pump (or even gravity) to every customer.
      A service for which you can charge what you like.

      Indeed it is such a good a business we let other Country’s run it for us.

      John you say competition is good for the consumer.
      The Banks, Low interest rates for deposits, high (margin) interst rates for borrowers.
      The Utility Companies similar charges, prove that is not the case at the moment.

      The very basics of life are now rising at a huge rate of increase, year on year.

      • Anonymous
        Posted November 6, 2013 at 7:04 pm | Permalink

        I like to think of myself as a capitalist, Alan, but the belief that capitalism is the solution for everything really is a myth is it not ?

        ‘We want to give the public choice.’ was John Major’s answer to everything.

        Choice ?

        No. We just want things that work and which don’t leave us with a feeling of utter dread every time a brown letter falls on the doormat.

        • alan jutson
          Posted November 8, 2013 at 9:14 am | Permalink

          Anon

          Agree, capitalism is not the solution for everything.

  7. Richard1
    Posted November 6, 2013 at 8:21 am | Permalink

    All this discussion of price controls is a proxy war by socialists like Miliband on capitalism. What socialists can’t accept is that capitalism is the greatest and most benign force in history for benefitting the human condition. Only by allowing markets to function and competition to enable the rise of successful enterprises and the demise of unsuccessful ones can business formation and innovation flourish. Capitalism is the only sustainable road to growth and prosperity. Price fixing by governments always leads to distortions And never succeeds in delivering best quality products and services over a period of time.

    • oldtimer
      Posted November 6, 2013 at 9:39 am | Permalink

      How true!

      The latest results from the British Retail Consortium reveal the effects of supply, demand and competition on its shop price index over the past year. Food prices are up by 2.7% over 12 months but other prices are down by 2.4%. Apparently clothing and footwear prices are down 10.7%. Energy and water supply both need a more capacity using new sources, better distribution and more competition. At present they are dominated by inefficient regulation.

      • forthurst
        Posted November 6, 2013 at 2:14 pm | Permalink

        “Energy and water supply both need a more capacity using new sources, better distribution and more competition.”

        …and less interference from the government on behalf of the EU which is a major source of the inefficiencies and higher costs.

        Re-clothing, I recall working on the computer systems of a major clothing group long before competition from companies like Primark appeared; in essence, the whole industry was in the grip of a cartel, with fashion marked up 4-6 times and menswear cost prices doubled; footwear now is undoubtedly cheap (as long as you don’t like walking).

        Food in the shops, of course, is affected by energy and water costs as well as the CAP and rigging of commodities markets by banksters.

        Water and energy need to be as cheap as possible in order to constrain costs to productive industry; however much competition and money making opportunities are provided by utility suppliers, they cannot sustain the economy; they are part of its cost base.

    • uanime5
      Posted November 6, 2013 at 3:24 pm | Permalink

      I seem to recall that it wasn’t capitalism that introduced minimum wage or improved the working conditions of employees. In almost all cases capitalism was fighting against this because it would mean they’d make lower profits.

      Let’s not forget that 1929 Stock Market crash was the result of a capitalist system built on unsustainable growth, or that when markets are free the result is cartels and monopolies because under a capitalist system monopolies and cartels make the most money.

      • Edward2
        Posted November 6, 2013 at 6:10 pm | Permalink

        Presumably you prefer the standard of living and personal freedom that the application of socialism in various nations brought to their citizens over the last hundred of so years Uni.
        North Korea, USSR, North Vietnam, Cuba etc.
        But of course these examples are not socialist countries according to you whereas Germany Sweden and Norway are!

        • uanime5
          Posted November 7, 2013 at 4:31 pm | Permalink

          Your inability to distinguish between socialism and communism undermines your argument.

          • Edward2
            Posted November 7, 2013 at 6:10 pm | Permalink

            Oh sorry they are just so different Uni
            Socialism is what they tell you are getting and communism is what it turns into.
            Power to the people ends just after the first and only vote.
            We know best just do as you are told.

        • Bazman
          Posted November 7, 2013 at 4:54 pm | Permalink

          They have cheap living in second and third world countries don’t they? Allowing all the shops, if not to be free very cheap and a quid to buy food for a week. Or so you tell us…
          ,

          • Edward2
            Posted November 7, 2013 at 6:14 pm | Permalink

            You would be a very rich man on your £35k in China or the Gambia Baz, but rather hard up in London.
            You still believe your nonsense that you need “western levels of income” anywhere in the world “to live like a westerner” I see.

          • Bazman
            Posted November 8, 2013 at 4:58 pm | Permalink

            How would you be ‘rich’ in China or The Gambia? You would be better of in the provinces, but in Beijing or Banjul you would be a lot worse off. Like here. What would be cheaper to make you rich? Rice and chicken ? I bet Uncle Bens and some quality chicken would not be much cheaper if any. The massive choice here is another factor increasing living standards. That does not exist in these countries. You are seen as rich and can pay, often well over the odds to for what is seen as luxury goods such as washing machines. A Russian fridge despite the jokes of Russian made goods is about the same quality and price of lower end one here. How can it be any other way?
            Another factor to consider is additional expenses that would do not really occur for the average person in the west on western income such as security. You seem to think that you can just wander around as you like in these countries spending cash and looking rich. No you cannot. ‘Life’ is cheaper. Count on it. Yours and theirs
            Tell what makes money go further in the second or third world or stop saying I am writing nonsense.

      • Mark B
        Posted November 6, 2013 at 7:35 pm | Permalink

        And what of your beloved Soviet Union, whatever became of that ?

        • uanime5
          Posted November 7, 2013 at 4:32 pm | Permalink

          What does a communist country has to do with socialism. I trust you’re not confusing the two.

        • Bazman
          Posted November 7, 2013 at 4:43 pm | Permalink

          It still exist here in the elite.

      • libertarian
        Posted November 6, 2013 at 10:23 pm | Permalink

        WRONG as always on all counts.

        Go and actually read some history. Oh this is the man that looks at charts upside down and believes China has the best employment rights in the world

        • uanime5
          Posted November 7, 2013 at 4:34 pm | Permalink

          I have read history which is why I know that it’s not employers who call for better employment rights and are constantly fighting against them.

          Also I never claimed that China has the best employment rights in the world, you just made this up. I assume that you’re annoyed that I pointed out that you interpreted your own chart wrongly and thought that the USA was the country where it was most difficult to fire people.

      • Richard1
        Posted November 6, 2013 at 10:40 pm | Permalink

        It is highly debatable as to whether the minimum wage is a net benefit for poorer people. It depends where its set – if too high it destroys jobs. The real Ecnomic damage done after the 29 crash was statist interference with free trade on both sides of the Atlantic. The point about capitalism is that incumbents are challenged and monopolies and cartels don’t survive. For monopolies and cartels to flourish they need implicit or explicit state protection – quasi-socialism in fact (like the energy market in the UK now).

        • uanime5
          Posted November 7, 2013 at 4:37 pm | Permalink

          The real damage from the 1929 stock market crash was the stock market crash, not the Government’s attempts to restart the economy after the banks collapsed because the state didn’t bail them out.

          Also under a capitalist system only monopolies and cartels survive because it’s impossible for small companies to compete again them. State protection isn’t required, which is why all the trusts were able to dominate the USA despite the state not giving them any state protection.

        • Bazman
          Posted November 7, 2013 at 4:51 pm | Permalink

          Not debatable whatsoever.Blah!Blah! Capitalism etc…
          The jobs paying less then the NMW are not a benefit to anyone other than the employer. In this country if there was no NMW it would cost a fortune in benefits to bring it up to a liveable level and no mainly British person would work for it and who can blame them? All the pound an hour jobs would be done by desperate people. A middle aged man in a isolated town with children would work for this? Would you?
          Explain how they would and how you would force them to if they did not? What ‘incentives’ would you give them?

    • Bazman
      Posted November 7, 2013 at 5:16 pm | Permalink

      This is pure propaganda and folly from you. Are wages and benefits to generous because prices are falling and need to be cut to reflect this too?
      Prices of all things are rising and wages are stagnating. In the last decade prices of proper have trebled and everything else as rule of thumb has doubled, some more than others. Energy much more. It is as plain as the nose on your face. Are you both wealthy or just stupid? As for footwear and clothing being cheap. It is if you don’t care how long it lasts and how you look. Rockport boots are still well over a hundred and forty quid and a decent jacket will set you back the same at least. Electronic maybe costing less but how often do you buy a computer or a toaster? Even this is tenuous. I have just replaced a £140 microwave bought in 1999 with the same this week costing £190 and a £200 Sat Nav with a cheaper less features, but similar one for a £100. You are going to tell me this is fall in prices right!? Is beer getting cheaper too? I’ll point it out to the landlord. Ram it.

      • Edward2
        Posted November 7, 2013 at 6:16 pm | Permalink

        Yet your solution is just more and more taxes and Government spending.

  8. The PrangWizard
    Posted November 6, 2013 at 9:19 am | Permalink

    Rather more pressing than water, and considerably more important.
    How is it that the British government is considering restructuring our naval shipbuilding capacity just before a referendum when one nation, Scotland may vote to break away from the UK? Is it not subversive and irresponsible? Why would the British government want to do this? It’s another case of cynically sacrificing English interests and appeasing Scottish ones. All shipbuilding may go to Scotland. The idea that England will do the maintenance is a sick joke.
    They know no-one speaks for England and they can get away with it. Who will build the ships for the Navy of England (and Wales) in future when we have done away with all the skills in England? A foreign nation? Is that a good thing?
    There is no solution other than as a minimum first a Minister for England and then an English parliament. Independence should follow. Why should I in these circumstances wish to defend the Union? It does nothing to defend and further my interests in England.

    This plan must be stopped.

    • Max Dunbar
      Posted November 6, 2013 at 2:38 pm | Permalink

      I sympathise with your view but don’t let the ‘subversives’ in Scotland and England who want to break up the UK use you inadvertently to assist them. They want to pitch us against one another and destroy our nation. Scotland is your country as much as England is mine and I will do all I can in Scotland to maintain our union. It is greater than the sum of its parts and Scotland, although economically poor, is strategically very important to all of us. The Union will not be destroyed.
      The Labour Party created this problem and the far-left SNP have profited from it so far. They will fail.

    • Denis Cooper
      Posted November 6, 2013 at 3:08 pm | Permalink

      As I understand the Portsmouth decision will be reversed if the Scots vote for independence.

      So now we will have some Scots saying “Better vote to stay in the Union and keep these jobs and others like them”, and probably rather more Scots saying “Bugger you, if you think you can get me to vote against independence in this kind of way you’re wrong, exactly the opposite, you’ve just convinced me that I should vote for independence from your rotten conniving government”; while in England there will be more people wanting to egg on the Scots to vote for independence even though that would not in fact be in the interests of England, not that what the English think is of any importance to the British government.

  9. Bryan
    Posted November 6, 2013 at 9:22 am | Permalink

    As for as I am aware the cost of the water falling from the sky is the same, zero, price as it has always been.

    More than half of my water bill is to take away the water, via existing pipelines, which has fallen for free and has not been collected for use.

    My waste water is disposed of similarly, also at a cost to me.

    Why do the water companies need to increase prices?

    • Bazman
      Posted November 7, 2013 at 4:41 pm | Permalink

      If you can prove that your rainwater does not enter the sewage system you pay less.

  10. fake
    Posted November 6, 2013 at 9:30 am | Permalink

    Why do other countries that have nationalized water have it cheaper.

    Getting planning permission for power stations is difficult enough, How can you have free competition in water without the ability to freely build reservoirs?

  11. Bert Young
    Posted November 6, 2013 at 10:00 am | Permalink

    Water is a national resource and should be managed on a national basis .There are difficulties in transporting water from the North West and other water “rich” areas , but more use could be made of the canal system . In the Thames Valley where I reside , it is overpopulated with further substantial growth planned in housing . Thames Water are handed a blank cheque from their consumers underpinned by the claim that the “constraint” cost of London on their books is a burden the entire area has to pay for . A “national” pricing structure should be put in place with the rider that overseas ownership and investment must not exceed 49% .

    • stred
      Posted November 7, 2013 at 10:14 am | Permalink

      My area on the South Coast used to have less than average water charges, less than half of South West. Then they had to comply with water purification regulations and the price crept up. But the biggest rise has followed the building of new sewage treatment and storage. There was a campaign lead by wind surfers who liked to surf around the outfall and complaining about feeling ill. Splashing around in freezing cold seawater would have made many ill anyway.

      Now we have electrically pumped mains running 8 miles from a huge tank under the beach from Brighton to Hove. The pumping stations are wonderful, with stainless steel poles running over the roof to resemble a fish and lovely flint and brick walls. The new treatment plant has the latest UV sterilization and the outfall is purer. Everyone pays double and the windsurfers can splash about in it as much as they like. And the company has doubled in value and turnover. They must just love the EU and Whitehall

  12. Roy Grainger
    Posted November 6, 2013 at 10:57 am | Permalink

    Water is an area, like electricity, where companies are required to add additional charges to bills to fund long-term strategic infrastructure improvements (or claimed improvements). In my area this is the Thames “super sewer” which we will be paying for for years to come. In this environment pure competition on prices simply won’t work. More clarity on what proportion of bills are due to these “green” political decisions would be useful.

    John: I would be interested to hear your views on these very activist parliamentary committees that we seem to have acquired in recent years – some of them seem to be little better than kangaroo courts.

  13. Lindsay McDougall
    Posted November 6, 2013 at 11:58 am | Permalink

    Presumably the competition in Scotland has resulted from competition in sources of supply and/or duplication of distribution networks. It’s not certain that this will lead to lower prices over the long term. How far down the supply chain do you want such competition to reach in domestic water supplies?

    • Denis Cooper
      Posted November 6, 2013 at 3:27 pm | Permalink

      I think it’s only available to large business users, and maybe they are not overly concerned about getting the same water as before through the same distribution system as before, provided somebody will charge them less.

      But while a putative new market entrant called the Highland Water Company might run a tighter ship and charge me a bit less for the water piped to my house they couldn’t actually supply me with water extracted in the Scottish Highlands unless they invested in a complete new distribution system providing a continuous pathway for their water from where they extracted it right down to my house; even if they ran their own large pipe down to this town and piggy-backed on the existing mains water distribution system I would only be getting some of their water mixed in with the same water as now from whatever more local sources, at least unless and until all of the householders in the town had switched to the Highland Water Company.

  14. Terry
    Posted November 6, 2013 at 12:04 pm | Permalink

    I believe during WWII, civilian contractors to the Government were permitted to charge scrutinised full costs plus 10% profit, for their products. Couldn’t a similar scheme be enforced by the Utility Watchdog authorities? If they have a monopoly then this should be the price to pay, to protect us consumers.

  15. APL
    Posted November 6, 2013 at 12:06 pm | Permalink

    JR: “We do not have sharp exchanges on bread prices in the Commons .. ”

    True, but there was a time when the price of bread did feature in the Commons debates. That was when the price of a loaf of bread (1968) was nine pennies, now since the price has exploded, consumers have become accustomed to paying over 1000% more.

    • APL
      Posted November 6, 2013 at 5:30 pm | Permalink

      “since the price has exploded”

      Correction. The value of Sterling has dropped like a stone in a bottomless pit. Under the ‘stable’ inflation policies of successive Labour and Tory governments.

      And for their stellar performance, MPs want a pay rise.

  16. The PrangWizard
    Posted November 6, 2013 at 12:32 pm | Permalink

    Further to my note above, I heard Cameron say in Parliament at Questions that ‘ if we had an independent Scotland we would have no shipbuilding at all’. Who is ‘we’? Does he understand what he is saying.
    So, it is true England will have no naval shipbuilding capacity. He is appeasing the Scots at the expense of the English. Cynic.
    It is becoming clearer by the day that this government and certainly Cameron, has no wish to defend English interests. Does he ever use the word England?
    Is there any MP, anywhere, in any party, who is will to speak up and defend English interests?

    • Roy Grainger
      Posted November 6, 2013 at 3:39 pm | Permalink

      Just out of interest, do you have any idea why Cameron is so keen on keeping Scotland within the UK ? Obviously in terms of MPs it would be to his great advantage for Scotland to disappear. I mean what practical reason does he have for wanting Scotland to stay ? I’ve heard all the stuff about the Conservatives being historically a unionist party but those are just words, they are happy enough to say that Northern Ireland can leave the UK should a majority there want it.

      • ian wragg
        Posted November 6, 2013 at 5:34 pm | Permalink

        This is the EU position and call me Dave is just following orders. If Scotland separates a Tory majority in England will ensure exit from the EU in a referendum. Can’t have that can we.

  17. julian
    Posted November 6, 2013 at 1:43 pm | Permalink

    The discussion is moot – water supply is not an ‘industry’ it should just be stored, processed and piped by a state entity. And yes that is coming from an advocate of free enterprise!

  18. A.Sedgwick
    Posted November 6, 2013 at 1:51 pm | Permalink

    Water costs us over 25% more than our electricity annually and this is after conserving water e.g. water butts for the garden, short showers and largely using electricity as we want. I think that we can take all the commotion over fuel, energy and now water costs is a tacit admission by this and the previous Government that CPI and RPI calculations are so flawed for most people as to be useless. If only the basics to live on were the calculation inflation rates in recent years would certainly be double if not treble the official, sanitised figures. This, of course, would wreck Osborne’s budgets but at least we would be spared his smoke and mirrors economics.

  19. forthurst
    Posted November 6, 2013 at 2:48 pm | Permalink

    Further fallout from the calamitous aircraft carrier order: BAe closing shipyards because there is no longer a pipeline of naval ships which might be of some use to us and possibly others in terms of future foreign orders. Not much demand for aircraft carriers, possibly none for the STOVL variants if there is an auction for the second one, as buyers would be somewhat constrained to find alternative suppliers of aircraft with STOVL capability.

    So how is production of the designated fixed wing for the aircraft carrier(s) progressing?

    (refers to Wikipedia and claims re F 35 which I have not had time to check out ed)

    Neither of our aircraft carriers are to be fitted with CATOBAR catapult or barrier arrest because of the doubling of estimated costs, so exactly how will these aircraft, if they ever get into service, fare on a vessel which does not offer alternative launch and recovery mechanisms?

  20. uanime5
    Posted November 6, 2013 at 3:29 pm | Permalink

    As long as it’s difficult to enter the water industry there will be little competition. Despite increased demand in the south east there have been almost no new water companies building new reservoirs to supply this demand.

    • ian wragg
      Posted November 6, 2013 at 5:39 pm | Permalink

      The building of reservoirs has been banned by the EU due to their insistence that we must reduce consumption due to climate change. The fact that they are so consistently wrong doesn’t matter. A reservoir which had planning permission was cancelled by call me Dave’s lot to comply with EU “advice”. Just the same with power. Price the proles out of the market. Who cares if a few thousand die of cold. There are plenty more from the east to take over. The deaths can be included in Net immigration to help Dave.

      • Bazman
        Posted November 7, 2013 at 4:39 pm | Permalink

        Stopping water companies from closing them as they have a large number of would be a start.
        Here is a story from your gospel.
        http://www.telegraph.co.uk/earth/drought/9236909/Thames-Water-accused-of-mismanagement-by-closing-two-dozen-reservoirs.html

      • uanime5
        Posted November 7, 2013 at 4:46 pm | Permalink

        Actually according to EU law they want countries to focus more on preventing water being wasted rather than building new reservoirs because if one country takes water from a river or the groundwater it leaves less water for the countries further downstream. So it’s nothing to do with climate change and more to with preventing one EU country harming another EU country.

        • Edward2
          Posted November 7, 2013 at 6:18 pm | Permalink

          How kind of them.

  21. margaret brandreth-j
    Posted November 6, 2013 at 4:28 pm | Permalink

    Perhaps if we bless the poor creatures who slimily attempt to make more money out of our natural resources , we will be redeemed and allowed to live our lives in peace from more competition and looking around for a deal.

  22. Bazman
    Posted November 6, 2013 at 8:46 pm | Permalink

    Could anyone explain why Anglican water now bills every three month when a few years ago bills were every six months? Is this to inform the customer and help them to budget more efficiently with their costs. You laughably know that this is not the case. It is to hide ever increasing amounts. Comrades and Party members would you agree, or do you like in Soviet Russia have the state pay via free utilities or expenses? The bedroom tax supported by party bosses claiming massive utility bills from the state. Presidents got beaten up in Russia for this. Yeltsin did not as he was respected for being small potatoes. Where does Davey (words left out ed) fit? We know where Dave.
    Ram it.

    Reply I like the idea of a holy water company, but I think it is Anglian.

    • Denis Cooper
      Posted November 7, 2013 at 10:04 am | Permalink

      Well, the holy water could not be delivered to houses through the same pipes as ordinary water. Not unless the distribution system was flushed out every Saturday night ready for the unadulterated holy water to flow on Sunday morning.

    • Bazman
      Posted November 7, 2013 at 4:22 pm | Permalink

      Could be East Angular. Ain’t that abroad?

  23. Credible
    Posted November 6, 2013 at 9:22 pm | Permalink

    Since water was always going to be a monopoly, why was it privatised in the first place? Political dogma? A quick buck?

    • Bazman
      Posted November 8, 2013 at 6:32 pm | Permalink

      You got it!

  24. They Work For Us
    Posted November 6, 2013 at 10:05 pm | Permalink

    We seem to be suffering a shipbuilding version of the Midlothian question.
    I don’t know whether Portsmouth has any Conservative MPs but if so their electors should tell them that they will not be voting conservative and that they will do their damnedest to cost them their seats. MPs should be telling Cameron that they will not and dare not support any Govt measures that will facilitate the work going to Glasgow because it is more than their own job is worth.

    On the subject of water, houses on the Greek islands and e.g in Sicily capture rainwater from the roof and store it in an underground system. Drinking water is catered for by bottled water and water for hot drinks will be boiled in a kettle anyway. No doubt planning regulations and building regulations would prevent this nifty sidestep of water charges.

    • Bazman
      Posted November 7, 2013 at 4:36 pm | Permalink

      It’s not a bad idea on new builds. Having the toilets and the garden fed from a large tank. Digging out the hole with a JCB and putting in cheap plastic tank with a motor must on the face of it be cheap, but to retro fit a tank just does not make financial sense. If it did I would do it. Building companies will not do it unless forced by legislation.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page