Making water a Statutory set of regional monopolies leads to high prices, poor service and shortage of supply. Competition is the best regulator. The competitive bread industry has expanded to meet the demand of 10 m more people living here. Let’s do the same with water.
Too many tell me water is a natural monopoly because you only have one water pipe into a house. Funny that. Most of us have gas heating or cookers. We only have one gas pipe . We can choose from a variety of gas suppliers competing for our business, using that single pipe.
We used to have just one copper cable into our homes to receive a phone service from a poor monopoly supplier. When the monopoly was removed by Parliament some competitors offered to put a better quality higher capacity cable in for us to improve the service. We also started buying phones that worked on wifi.
There can be no downside to lifting water monopolies. In the unlikely event that water is a natural monopoly nothing would happen. In practice as with gas and telecoms lifting the monopoly would give us choice, more supply and lower prices. It could lead to bigger better changes to be discussed another day.
July 26, 2025
In principal you are correct. However for it to work for both customer and supplier we need a national water grid connecting the input points. Water would then equate with gas and electricity for national distribution and telephones for national receipt. I have in mind loch Lomand to Keilder to Thirlmere to Hawswater to Lake Bala and then the resevoirs of the South East which I cannot name. It might be wise to consider a desalination plant using Israeli technology to add to supply in the South, East and West. The above is a concept, I leave it to the water engineers with victorian genes to plan the reality, supported by a government of equal determination and wisdom.
July 26, 2025
Water is heavy and expensive and rather expensive to move about. We would need competent, honest and fair regulators which is something the government has been very poor at organising for rail, water, financial services, electricity…
July 26, 2025
@Lifelogic – ‘competent, honest and fair regulators’, those friends of friends that can’t get real jobs you mean
July 26, 2025
+1 who then look to expand their empires and often conspire with the regulated company to fleece bill and tax payers! See the appalling Covid vaccines regulators here even partly funded by Big Pharma! Any criminal prosecutions yet?
July 26, 2025
They do it with oil.
July 26, 2025
I daresay Joseph Bazalgette could take on your challenge! Your point on the difference transmitting water v electricity and gas are well made, as Lifelogic points out. If transmission via a grid, where gravity does most of the work, between systems could be engineered, we’d probably not need many new reservoirs. Now, has anybody done something like this before….
PS how many ‘energy supply companies’ have gone bust?
July 26, 2025
As to before, examine Israel, different but an eveen greater challenge. A water grid ia a national project.
July 26, 2025
Israeli Mekorot is a state company.
July 26, 2025
Its ownerrship is irrelevant. The only question is does it work. In Israel it does. You only have to fly over Israel to realise it is very different from its neighbours.
July 26, 2025
So what?
July 26, 2025
How many have gone bust? Wasn’t that engineered by the ‘Market’ to get back to where we are today with many fewer competing companies? The minows giving the lowest price were forced out.
July 26, 2025
Dear Peter Wood,
Joseph Bazalgette’s brilliance was to remove London’s sewage, rather than to supply clean water. The recent scandals and the sharp rise in bills are all about sewerage, not water supply. Sewage removal and treatment now account for most of people’s “water bills” as well as the big rises. The regional monopolies are for sewerage, with about a fifth of customers buying their clean water from an independent (monopoly) company, though the bills are combined. If Sir John wants competition in sewage removal and treatment I would be interested to know how that might work.
July 26, 2025
Good point, and one not adequately appreciated. My suggestion of Mr Bazalgette was his ability to design tunnels of adequate capacity for a growing metropolis at reasonable cost. He was a brilliant engineer.
My hint was a nod to the other great engineers of the age of canals. We know how to move water, make it flow down a gradient, surely we can learn from them to improve the way we do it on this small island?
July 26, 2025
31 since 2021.
July 26, 2025
Because of Government gerrymandered pricing. They scuppered the market and the competition.
July 27, 2025
hefner
Not surprised, but they really were just traders, few actually produced any electricity, they were just opportunists gaming the system in the guise of being suppliers.
July 27, 2025
Yes the Victorians.
July 26, 2025
It’s not so much the supply of water but the treatment of effluent. Ate they going to compete for that. Who is going to be responsible when they all say, not my problem guv.
I can see it becoming a proper digs breakfast.
July 27, 2025
It is a water company overhead like pipes and pumps. It could also produce income from purefied water and fertilizer.
July 27, 2025
The fertilizer is human excreta derived fertilizer HEDF’s. With 70m producers working 24/7/365 it could help make up for what we no longer get from Ukraine.
July 26, 2025
Who owns and maintains the ‘grid?
You can calculate losses in a copper wire, but you cannot calculate and attribute loss in supply of water from multiple water suppliers.
Reply You meter it into the pipe and out of the pipe.
July 26, 2025
How about going back to the set up before privatisation?
Regional monopolies – but run by employees who were mostly there for life, with head who was reasonably well paid (but not earning a fortune) and public service ethos rather than profit maximisation for a foreign ownership.
July 26, 2025
And billions not being syphoned of for shareholders, often abroad. The problem was, as usual politicians who refused to put in any investment as they preferred their own harebrained schemes to waste money on, still do, rather than something of importance to the paying public.
July 26, 2025
I am fully in sync with competition being the most effective way to ensure quality and reliability of service.
The great concern I have is regulation.
We have seen across the whole of business regulation running wildly away with its own sense of purpose.
The constant urgency of the Public Sector watchdogs and regulators, to show they are ‘doing their job’ all too often results in interference and blocking of innovation.
Deindustrialisation is the most alarming and clear evidence of what happens when businesses are not allowed to operate freely. The shrinking of industry in the UK is entirely due to regulator interference. In the case of manufacturing, energy costs have destroyed our ability to operate profitably in the UK. To remain in business we offshore and thus create unemployment and skill loss here in the UK.
The clear indication of regulation gone mad is HS2, closely followed by nuclear power plant construction.
How do we control the regulators?
July 26, 2025
Indeed good, wise, honest regulation in the UK is virtually impossible to find. Regulators have their own interest and rarely do they do much of value for consumers. More interested in growing their regulation industry and its powers and income!
July 26, 2025
I can justify any of my views with a conspiracy theory.
July 26, 2025
LL
The Market is the only true regulator in a Market driven economy. The only exception is, when that Market has a monopoly.
July 26, 2025
Or duopolies, virtual monopolies etc. or barriers to switching as you can get with banking, (phones if you cannot keep you number)… especially the state ones NHS, state schools, water, justice…
July 26, 2025
Or when there is a monopsony.
July 26, 2025
LL,
Administrators create administration for other administrators to administrate. Whilst creating obfuscation requiring clarification from other administrations. Civil service springs to mind.
July 26, 2025
De-industrialisation is not entirely a failure of regulation. If the consumer buys cheap imported goods heavily subsidised by the exporting nations government instead of local goods, what do you think happens to local manufacturing.
People never consider the longer term and just demand everything must be cheaper and whine when it isn’t. Which is what happens when there are no longer any local alternatives and foreign interests can dictate all terms.
Commerce is continual conflict and the economy depends on a balanced approach, government interference is usually for short term advantage but generally leads to long term disaster.
July 26, 2025
@dixie – the result of fair, mutual, reciprocal arrangements. Politically motivated, the new world war of weaponising trade – on that POTUS(Trump) is 100% correct
July 26, 2025
Trump is entirely correct in telling Starmer to ditch the lunacy or renewables. Good article be Matt Ridley today in the Mail but see his X twitter for the corrected version.
July 26, 2025
Also Trump advising Kier Starmer (and the rest of Europe) to stop the vast levels open door mainly low skilled immigration levels.
Alas Zero chance of Two Tier, Free Gear, Rarely Here, Tax to Death (& largely piss down the drain) Kier listening to this wise advice! Not much chance that Kemi will either it seems. Still it seems she is getting her chain saw out. But she has almost zero chance of even gaining power even with one!
July 26, 2025
Funnily enough it was Ridley pere who was the artisan of the 1989 water privatisation.
July 26, 2025
Hefner is wrong again. Nicholas Ridley was NOT Matt Ridley’s father, but I believe, his uncle.
July 26, 2025
Guilty as charged with respect to buying very inexpensive electronic modules on eBay. They are often just a few pounds (only a bit more then the UK postage) much less than I can buy the discrete components for and have been shipped all the way from China too…
However, it’s pretty hard to buy anything that’s really made here in UK these days – it’s all imported. We live in a disposable world and my family are not interested in “hand-me-downs” (even good quality furniture like Ercol). If we ever get cut off from these foreign manufacturers, things are going to get very expensive, very fast and perhaps attitudes to thrift will change too.
July 26, 2025
Certainly, competition is the thing that can be relied upon to protect consumers. Infinitely more so than the altruism of politicians.
July 26, 2025
Incredible, Sir John is unable to figure out that his beloved ‘competition’ will be on tiny differences on prices without any difference whatsoever on the quality of the distribution, the safety of the water provided to the customer, the treatment of the waste water or the recurring problems of the surge of untreated water when storms occur.
Reply Pompous nonsense. Plenty of scope for variation and innovation.
July 26, 2025
Yesterday I had my water bill, it’s gone from £190 to £270 for half a year. I’m on a meter and my consumption is broadly the same. Where is the regulator.
July 26, 2025
@Ian wragg – working for your suppler
July 26, 2025
Pompous nonsense? Two simple questions about ‘variation and innovation’: How will you make various companies provide water different in quality or safety using the same distribution network? Will you create other networks for distribution or subsequent treatment?
It would help you not looking stupid if you were to provide proper answers.
Reply Competition will invest more and come up with a range of answers.
July 26, 2025
Is the electricity coming out of my power points any better quality than any other?
July 26, 2025
If it’s generated by good old gas it’s cheaper. No so much ‘downtime’ – so yes, if you have the right supplier it can be better. With competition much better.
July 26, 2025
‘Competition will invest more and come up with a range of answers’: Given that in your dream world the competition is likely to involve the same type of companies presently in charge of water distribution and sewage/sewerage (private equity, subsidiaries of multinational corporations) I am wondering why since 1989 these companies haven’t had ample time to come up with such answers?
Other possibility: Sir John is simply too stuck with privatisation to admit he might have been wrong and will continue despite everything thrown at him to defend the indefensible.
Reply They are not allowed to compete! It is a Statutory monopoly. Many might compete with new capital and solutions if allowed, as happened in energy and telecoms.
July 26, 2025
The surge in waste water when storms occur is a modern issue and is more to do with councils refusing to clear road drains, clear culverts and water courses so rain water can get away. The failure of government to dredge rivers, since the EU declared dredge spoil ‘toxic waste’ is also an issue driving poor flood water management. Because dredging disposal is now expensive it is now routinely done.
The failure of successive administrations to repeal that lunacy EU regulation, is why we now have sewage being flushed into rivers when it rains.
July 26, 2025
Not routinely done, grr, I hate typos
July 26, 2025
Rod
Spot on. And you would think that, since we have supposedly left the EU, we would have amended that ?
July 26, 2025
Mark
“Amended that” In your Dreams.
This lot in charge want more EU, not less.
July 27, 2025
We’re still under the control of the EU’s Environmental Regulations.
July 26, 2025
Ever considered the effect of the reduction of grants on local councils? (see ‘Failed State’, S. Freedman, 2024, Pan Macmillan, ch.2 ‘Enemies within: How local government was destroyed’ and this from Thatcher to Blair/Brown and the successive Conservative governments since 2010).
Reply Local government spending kept rising throughout. Today practically all the schools budget, around half total local government spend is government grant. most Councils leave this out of their misleading statements of how much central governmentb support they get.
July 26, 2025
Don’t believe everything you read in the Guardian hefner.
Do some proper research and have a think before you post.
July 26, 2025
No Hefner, YoU! W3 have found someone more confused than the good old Gruniad!😂🤣
Closed mind, incapable of accepting results as proof of right over wrong.
Did you work in Accounts?
July 26, 2025
State and local authority spending has risen greatly over the last few decades.
Productivity and gains through efficiency has fallen.
Quality of services are worse now than years ago.
Nothing to do with 10 million new arrivals over a similar period needing State and Council support.
But for you hefner no State sector is too big and no level of spending too much.
Just keep on with the failing policy of taxing us more and more until we all end up poorer heffy.
July 26, 2025
R to R
Perhaps in a future article you would like to expand on this ?
July 26, 2025
I don’t disagree in principle but there are at least two issues
Wouldn’t this be different to the other ex-state monopolies in that the assets are already owned by a private company so would involve an enforced change of ownership and contracts (cf anti-trust cases such as AT&T) – how much would this cost the taxpayer to even get to the point that competition would begin.
Effective regulation – domestic water is not fungible like electrons or gas, it has additives and this would need to be consistent and verified. You’d need a regulator who is competent and has teeth which is sorely lacking now and led to the current situation.
There are critical health issues directly associated with water quality and delivery. It would need to be clear who is responsible for what and again needs regulation to ensure proper and speedy resolution of issues.
Reply Critical safety issues with gas handled by competitive business. Not a good idea to blow up or poison customers.
July 26, 2025
You do not need a regulator. All regulators are are a firewall for MP’s and jobs for the boys and girls. All you need is a properly written contract with clear specifications and fines for non-compliance. It works in the Private Sector.
July 26, 2025
“Critical safety issues with gas handled by competitive business. Not a good idea to blow up or poison customers.”
Disingenuous. Critical safety issues are handled by HSE, Ofgem, the Environment Agency, myriad government-imposed laws and regulations etc. etc.
Reply No private water company would risk poisoning customers and no gas company would risk blowing up customer premises. Doing so pcoukd be a serious criminal offence as well as a business killing strategy.
July 27, 2025
Reply-Reply
The Camelford incident poisoned people, yes it may have been an accident, but it happened, even with regulation.
Likewise we get the inevitable gas leaks and explosions from time-time, again with regulations.
Yes Accidents happen, but with self regulation they tend to happen more frequently.
July 26, 2025
In principle it could work. In practice it will not. The reasons for failure will be the incompetence and ignorance of the political class responsible for legislating, regulating and taxing such an industry. In addition, at times, sheer spite will guide their actions. Why should investors trust them enough to risk the billions needed to reinvigorate the industry in the way you propose?
Today I see the FT has a headline about the fall in CGT receipts following changes in taxation. Yet another example of ignorance and incompetence at work. Daily we hear and reports of businesses, both large and small, ceasing business because it is no longer viable. Yet more examples of the ignorance and incompetence of the political class and those advising them.
Reply so why trust government with monopolies?
July 26, 2025
R to R
For the same reason we do not trust private companies, some owned by foreign governments, they are MONOPOLIES !
July 26, 2025
So the idea is to remove monopoly status.
Surely you agree?
July 26, 2025
Business failures are always happening. The question is whether this has increased recently.
What is needed is an environment that encourages British enterprise and people starting and developing their home grown business. What I fear the government will do is hammer small businesses even more and try to seduce foreign investment with grants and subsidies.
July 26, 2025
Water has differences.
If I have problems with gas supply yes I can change the retail provider but I can also use alternative energy and infrastructure (electricity) from alternative sources, including my own. If I have problems with Virgin cable I can switch to a physically different access provider such as BT (with the different) retail providers or even satellite.
I do not have these options with water.
Reply with competition you could have options
July 26, 2025
@reply, you could but there would be lots of road works – or do you envisage something equivalent to rail with a corporation owning and maintaining the pipes and the competition being for the supply and disposal?
July 26, 2025
R to R
All those ‘options’ will mean in practice is to introduce a middle-man which will drive up cost for zero benefit.
July 26, 2025
My current water supply comes from a private borehole that I share with neighbours (including the neigh-bours in the paddocks). Sewerage is via a biodigester and septic tank that only needs a pump out every few years. Obviously not a solution available to everyone, but at least in some areas one that could be greatly expanded: in Pennsylvania there are over 1million private boreholes among 13 million people. Maintenance of the pumps and water treatment system is by private contract. The DWI performs an annual inspection and water quality tests. The cost of electricity for pumping is probably the largest expense once the kit is installed, and aside from the UV lamp that has to be replaced annually and the salt for the ion exchange purification unit.
It does avoid the need for other infrastructure including distribution pipes, and relieves the pressure on facilities for the towns nearby.
July 26, 2025
So you accept that the suppliers of borehole pumps and sewage treatment plants provide an alternative? And they are private companies in competition with the monopoly water companies?
So you have made JRs point for him.
I wonder if you understand that?
July 30, 2025
It was precisely why I posted.
July 26, 2025
there are bigger problems amongst the public sector monopolies…
eg the probate office… has had a massive centralisation, the total number of probate registrars has gone from something like 60 nationally, to less than 3 full time equivalents… and the numbers of distraught families waiting to sell their relatives houses, and so on has got massive. the waits for longer than 12 months are through the roof. and yet nobody in the probate office is suffering any sanction at all for the poor service, they are all still getting paid, and their fat pensions, and no doubt their staff reviews say they are wonderful people. nobody but nobody is carrying the can for poor service. houses are empty because they cannot be sold, people are forced onto state benefits despite having lots of cash if only their inheritance was allowed to proceed.
or the financial ombudsman service, the service is shocking, late, little better than tossing dice for results, and openly and obviously corrupt in favour of the financial companies…
or the NHS, take any of the individual services, say, the ambulance service where they also run out of hours GP services, shockingly shockingly bad, following scripts like automatons, no common sense, or medical training, and actual access to the theoretical GP is after 12 hours of endless phonecalls you may get to speak to a GP who is currently 200 miles away… its just a nonsense. and nobody but nobody in the NHS is getting a poor staff review due to the poor service.
the list is endless. HMRC and benefits people are generating scandal upon scandal day after day.
the whole state apparatus is a failure. and yet the blob keep copying and pasting more of the same, that simply does not work.
July 26, 2025
Probate Services is something the Private Sector can do.
July 26, 2025
no doubt some big consultancy has been paid a fortune for recommendation to centralise probate services, and now its belly up their name is being protected
Reply Probate is mainly about ensuring payment of IHT.They are effectively a branch of the Revenue establishing whether an estate is IHT liable.
July 26, 2025
they are incompetent, they ask questions they already have answers to, they ask questions sequentially with 4 week gaps when they could all have been asked together, at its heart are the “registrars” aka judges who make decisions when there are disputes or issues but these are massively understaffed, the whole complaints, phone query handling, etc is incompetent. they have tried to turn things into workflows which are different every time and not able to be turned into workflows at all. all the solicitors in the country are furious. its a case study in how badly the state organises anything. unless you have the simplest of cases you have no chance. and not only does it leave beneficiaries without their money for prolonged periods it leaves houses empty for years as they cannot be sold, when we are crying out for places for people to live in this country.
July 26, 2025
‘ There can be no downside to lifting water monopolies. ’
When you are in a hole it is advisable to stop digging.
People now have experience of how bad the water companies in Britain have become.
Allowing even more chancers into the industry, with only persistently useless regulators to oversee them, is not a very good idea.
Politicians think it a good idea and the public suffers.
July 26, 2025
How bad water companies in Britain have become?
In the long, hot summer of 1976 certain regions had standpipes to ration water. Evidently the public owned water companies hadn’t put enough investment into reservoirs even then.
When I was a child all sewage in our region was pumped out to sea on the tide untreated, yet today we have a problem with that (quite rightly). It’s not as if the water companies have got worse, just haven’t improved as much as we would have liked.
Reply Agreed.Big increase in investment but also big rise in population so still short of capacity.
July 26, 2025
now that the online safety act is live, and people are actively being prevented from doing normal everyday things on social media, by state manipulation, where the state is actively supressing news it does not like, such as what the president of the US says, or what the protesters against immigration are saying…
we have US commentators who have already noticed the massive change in what is visible coming out of UK social media taking the mickey out of this country for having no free speech… and they are correct… its an absolute disgrace
and it will only serve to make the pressure cooker go to even higher pressures, as one of the release valves has been blocked.
I dont recognise this country anymore.
July 26, 2025
video of (action ed)against protesters is being blocked by the government…
this takes the covid powers to whole new levels
who exactly is using these powers for the government? and who exactly arbitrates whether they have got it right? and where is the appeal mechanism? and where oh where is the free speech?
I have seen some of the footage, the government are badly mistaken trying to hide this stuff, the truth will out eventually…
Reply What proof do you have of suppression of videos?
July 26, 2025
i have friends abroad who can see it… and we cannot see it… indeed twitter is putting up messages saying its restricted due to legal restrictions in the UK… there were massive protests against immigration last night in many different parts of the country and news of this is all being suppressed
July 26, 2025
some of the social media companies have just blocked uk users completely, they are not prepared to comply with the new rules, so have just removed themselves from the uk market
what a shocking state of affairs, its like living in china
July 26, 2025
I have the same reports from friends and family abroad who have more information than do we.
July 27, 2025
They’ve been suppressing news of Irish demos against mass immigration as well.
July 26, 2025
An Iron Curtain has defended across the United Kingdom.
July 26, 2025
I see Elon has tweeted his disgust with the new law
“It’s purpose is suppression of the people” as he says, that is certainly how it is being used.
This country is an international laughing stock.
I hope the ruling classes who came up with this madness rot in hell.
July 26, 2025
Whilst I appreciate your suggestions John, at present we do not manufacture water, we use what is naturally dropped from the skies, who would pay for the new reservoirs, the desalination plants if required, the new sewerage outlets and treatment works.
We have at present a Government appointed water regulator who has failed miserably would a new one set np by Government be any better.
Our Problem with water is too many people using what we already have (population explosion).
The so called privatisation of gas and electricity grew because smaller suppliers started up in very small premises (a couple of them in their own bedrooms) just trading supply, they do not actually produce anything, they do not add any or monitor the quality, they simply trade a product.
Surely the more people involved in anything, the more expensive it becomes because they all want a cut, perhaps one reason why we have the most expensive energy in the World.?
Reply There is plenty of competition in extracting and supplying gas to the gas grid and in different ways of generating electricity.
July 26, 2025
Reply – Reply
Agreed, but all of the new so called suppliers of gas and electricity are just traders, they produce absolutely nothing, its the old guard companies who have always extracted Oil, Gas, Minerals, etc.
How will water work who is going to produce or capture that, the old guard again ?
Reply Lots of new electricity generators. There will be various new water suppliers from boreholes , new reservoirs etc
July 26, 2025
I prefer to call those who sell to households retailers. In the gas market suppliers are just that: they produce offshore (a few even onshore) and deliver by pipeline, or ship in cargoes of LNG, or maybe purchase gas from Continental storage for pipeline delivery. Retailers are entirely free to buy from any supplier, so prices are fully competitive. We do pay more of a premium the more gas we have to import, particularly as LNG where we have to bid against other markets.
That is not the case for electricity, where retailers are forced to pay for high cost subsidised supplies in a reverse merit order system for renewables. Interconnectors too have a privileged supply position, while gas generation is subject to carbon levies. If we had proper competition in electricity supply we would have few renewables, we would still use coal, and we would build proven cheap Korean nuclear not costly unreliable experimental French EPRs. We would not be carpeting the country in wind and solar farms and pylons.
July 26, 2025
As ever we get the ‘what’ but not the ’how’ so looking at the responses people are struggling, as I am, as to how you compete nor the benefits which will only be at the margin and despite your protestations, we saw what happened with electricity.
In any event I am happy with my supplier. I suggest the current hysteria, latched onto by the ‘nationalisers’ is down to one company, allowed to be stripped and over geared by a poor Regulator.
One pipe, one grid, where is this ‘alternative’ water coming from? Are you suggesting new entrants?
Reply Yes new entrants, maybe new pipes, new sources of water, maybe different qualities of water. We beed innovation and extra investment urgently. Does it make sense to flush drinking quality water down the toilet?
July 26, 2025
JR we don’t even get drinking water out of the taps anymore. We have whole house filtration systems.
July 26, 2025
Sir JR. Scotlands water is run by Scottish water a public corporation owned by the Scottish gov. who invest circa £800m/year into it.
Scotland seems to have no problems with it’s water supply or sewage disposal. It is also not separately billed, it’s within the council tax charge (I don’t know if this makes it cheaper than English water, but expect it does)
We need English water a national company under the (UK) government (unless you give us an English government) To look after the English water system.
July 26, 2025
Take away all the money England gives Scotland and you will see how much the true cost of everything they have which is currently either free or subsidised.
July 26, 2025
Scotland isn’t short of water thanks to more rain and lochs as natural reservoirs. Were it not prohibited by the EU Water Directives which are still part of our law they could be selling water to England via new aqueducts. The same applies to Wales, where the Victorians arranged supply from the Elan valley to Birmingham and Lake Vyrnwy to Manchester.
July 26, 2025
The privatised model of the water and sewage dumping industry has failed the public.
The reason is clear; the industry was sold to rapacious private equity firms who loaded the water monopolies with debt. The proceeds were then paid out as dividends and huge bonuses for their senior management. The regulator OFWAT was allowed to recruit directly from the industry, failed to ensure investment in new sewage treatment works, new pipes, reservoirs etc and allowed the privatised industry to dump raw sewage into our rivers and beaches. Michael Gove sacked all the Environment Agency inspectors and stupidly allowed the water companies to self-report sewage spills
Many fail to see how competition could work because the infrastructure is Victorian and requires massive investment. Water and sewage treatment is not broadband and cannot operate using copper cables.
Sorry John, this isn’t one of your best ideas. Many across the political spectrum see re-nationalisation as the only way out. Labour’s idea to replace OFWAT with a new regulator will just kick the can down the road for another few years. The public would be best served by re-nationalising the whole industry for a £1 – without compensation.
Reply That is theft from people’s pension funds and savings. It will send a bad message to all investors in UK infrastructure not to invest for fear of confiscation of your savings.
July 26, 2025
You don’t need to steal, you can fine the companies in assets. Dump raw sewage into rivers and you lose a reservoir, which becomes the property of a public trust. The water company then has to pay for its maintenance. After a while the water company sinks under its own debt and the public trust takes over, using the same staff who know their business.
July 26, 2025
Or no longer do: look at the fire at the North Hyde substation feeding Heathrow. 60 year old transformers that were being overloaded and should probably have been replaced several years ago which had missed their regular maintenance for several years, and a management and workforce all concentrating on delivering for net zero instead.
July 26, 2025
this was done to railtrack, and network rail is little better, the signs changed and a few execs not much more
July 26, 2025
Dear Sakara Gold, My ISA includes shares in a big water and sewerage company. What have I done to deserve confiscation? The same question might be asked by many millions about their occupational pension funds, which are the biggest investors in the sector.
July 27, 2025
@outsider
You knew the risks when you decided to invest in the sewage dumping industry. There are lots of investment trusts managed by some of the best British managers in the business which pay decent dividends. The trustees of my pension fund invest in ESG firms and it’s doing quite well this year. And gold bullion is up 25% already.
July 27, 2025
Gold goes down as well as up as it is driven by market forces, just like any other investment or raw material.
It has had a good run of late I would agree, but then so did technology shares a few years ago !
July 26, 2025
The industry was sold to the public and their pension funds. The EU promoted takeover by EU national champions, enabled by Labour’s Utiities Act. OFWAT dropped several balls in promoting refinancing via private equity buyouts.
July 26, 2025
Sir John I find your telecoms examples politically expressed rather than technical and development with time related. Before fibre optic cable and wi-fi. There was only copper wire or coax cable to the home or both. This was for phone and cable TV. The cable had a number of insulated wires typically 4. This could support two telephones.
Your reference to a poor monopoly supplier is solely based on your hobby horse that the choice of phone style was limited before privatisation. The quality of service was good and in my opinion better than now in terms of problem support. Even now you are stuck with a coper cable until fibre to your door is provided. If you have cable TV this cable is now used for broadband. Another misleading point is that fibre is provided to the green cabinet in the street and copper cable from there to the house. Short lengths of copper cable can support high data rates for broadband using hi-tech modems.
What can be done with Telecoms should not be used as a justification for water, gas , electricity, and to some extent the railways.
a telecoms cable to the house can be provided in less than half an hour or even use radio.
The other services need heavy metal. The water, gas or electricity is the same and does not have the providers id on it. Just the bill tells you
July 26, 2025
My uncle was involved in the early research on fibre optics at STC and had several patents (some shared) in relation to that. It was thus a sort of family homecoming when FTTP was installed to my home. It will come to us all in due course.
July 26, 2025
As expected, instead of recovering the huge bonuses that Thames Water paid it’s senior staff from the proceeds of it’s recent re-financing, they (and the other water companies) have announced customer hosepipe bans over huge swathes the country.
Thames Water said prolonged hot weather meant there was less water available as well as a higher demand, with customers using up to 30% more water when temperatures were above 25C. This is an outright lie. The reason hosepipe bans have been introduced is because Thames Water has failed – again – to meet it’s pipe replacement program and leaks account for the 30%. Not their customers.
Thames Water have increased bills by 50% for 2025. Now their customers are to be prevented from using hosepipes to water their gardens or wash their cars. It’s long past time that the government re-nationalises the water and sewage dumping industry. Their private equity investors – who have taken £billions out in dividends – will have to take a massive haircut.
Reply So how do we pay to get tge assets? Why would it be different from when we had nationalised water that regularly imposed hosepipe bans and poured sewage into rivers and the sea?
July 26, 2025
@Sir John
Almost everyone acknowledges that water privatisation has failed. The main argument used against public ownership is the cost of buying back the water companies.
Research from the University of Greenwich has found that an average of 35% of customer bills in 2023-2024 was taken out – to pay for the interest on the companies’ ever-growing debt piles, to pay management bonuses and dividends to the shareholders. So over one-third of customer bills for water in England and Wales pass straight through the companies without being used for water and sewerage services.
Publicly owned Scottish Water doesn’t have to pay dividends to private shareholders, and lost just 8% of revenue in interest payments in 2023-24 – that is less than a quarter of the cost in England and Wales.
This means that if water in England was in public ownership, it would be four times cheaper to invest in cleaning up sewage
However, I do recognise that improving the current regulatory framework and addressing issues like sewage spills through other means, such as targeted investment and stricter enforcement, could be a more viable path. The debate over re-nationalizing the UK water industry is complex, with strong arguments on both sides
July 26, 2025
The answer is a regulator that stipulates customer bills have to pay for the running costs of the water industry first, with a certain proportion put by for investment, and the regulator caps customer bills. Then if there isn’t enough left over for interest on debts, the creditors can go and whistle. Fool them for giving the water companies money so they could pay dividends and generous executive bonuses.
July 26, 2025
Scottish water has the benefit of a less asset intensive business (lochs are free reservoirs), with written down assets of £7.5bn, of which £4.4bn is financed by government debt, with revenue around 20% of asset value. It also has a lower gearing ratio than OFWAT encouraged at other water companies, but Scottish taxpayers are getting no return on their equity.
Vanity spending for net zero may start to change that equation.
July 26, 2025
Good morning
And what about the other end ? Our kind host mentions the tap, but fails to mention the supply. ie Resourviours, pumping stations, treatment etc. Yes, they can all use the same pipe but, if you are not prepared to make significant investment in duplicating what is already there is little point and incentive for others to enter the market and provide competition.
The so called renewable industry has required both government legislation and subsidies for it to compete against established providers.
A new way must be found. One that is customer orientated. Provides some profit and continued investment. Full nationalisation or Privatisation are not the answers.
Reply You are not duplicating. We need more reservoirs, pipe capacity, treatment works. So why not allow competing suppliers to out in the new facilities?
July 26, 2025
If we need it then why just don’t we just do it ? No need to introduce other suppliers.
July 26, 2025
Because they have captive customers Hefner. No competition for customers.
July 26, 2025
Because there’s a hole in their budget – and because we are still abiding by the EU Water Directives that demand we ration water by price rather than build new supply.
July 26, 2025
Sir John
100% agree, the downside is the UK Government gave away the rights to the pipe system ‘in and out’ to what we call water companies. The dilemma? an infrastructure bought and paid for by the taxpayer, to get it back the taxpayer will have to pay billions for something the had already paid for.
The way privatisation was carried out with hindsight was completely flawed. Like all things Government, its Blob, they should never be allowed near business they don’t have the experience or competence, to even run themselves.
But yes it could be worth the pain, the cost, to remove long term burdens from the Taxpayer Shoulders. Lets also start with the NHS it will be easier, its 90% there, less costly than water/sewage and the results would come through quicker.
July 26, 2025
Water is fundamentally different to, say electricity. Who produces electricity? It depends. It could be a gas-fired power station, it could be an off-shore or an on-shore wind farm, it could be a tidal barrier, it could be Dinorwig, it could be a nuclear plant. A retail electricity provider can go to any and all of these to source electricity fed into the national network.
Where and what are the equivalents for water?
There’s no national network (and the idea of having one has been discarded as much more expensive than investing in more local infrastructure – do you want bills to go up even more than they have to pay for such a network?).
How can you have a competitive market when there’s no competition for upstream providers?
Saying “privatise water” while saying nothing as to how and how such a market would work is nothing more than detail-free ideology.
Reply Once the monopoly was broken all sorts of providers would emerge.There would be groundwater extraction, competition for river extraction permits, new reservoirs. Given our shortage of pipe capacity and old leaky pipes there would be new pipe proposals. there will be ideas to create more links between regions and river basins. Might e,g, use canals and rivers to move more water.
July 26, 2025
Ross Clark says in the Sun today ‘According to a recent YouGov poll, the public favours public ownership of energy companies by a margin of 71 per cent to 17 per cent and of water companies by 82 to eight per cent.’
July 26, 2025
As has been noted the lack of a national water grid makes true competition impossible.
More interesting is this claim “Competition is the best regulator”. So, if I have two competing companies who are offering to process my waste water and sewage why would I choose between them on the basis of anything other than price ? So why would they do anything other than cut costs and investment to the bone and push up against and breach environmental legislation ? How on earth is that competition regulating anything ?
July 26, 2025
But Sir John, how can competition work with water utilities when we don’t have any freedom of choice whatsoever? It’s a monopoly and this is the fundamental problem. Please explain?
Reply you allow competition and then there will be choice.
July 26, 2025
You are talking choice but choice will only be how much the consumer pays.
I’m afraid there will not be a new water distribution network being built; the present one with 171 litres of water being wasted by each potential E&W household every day has not seen much improvement despite the £64 bn debt (but £77 bn dividends) accumulated by the British water companies since privatisation in 1989. To put into context at the time of privatisation the debt of the Regional Water Authorities was written off.
In 2025 the National Audit Office estimated that if the process of replacing worn-out water pipes continues at the current rate it will take 700 years for the task to be completed.
Similarly I doubt there will be new wastewater systems developed in parallel to the existing ones.
´How our water went to shit’ O.Bullough, Prospect Aug/Sept’25.
July 27, 2025
‘You allow competition and then there will be choice’: Blessed are the simple-minded, the Kingdom of Heaven is open to them.
July 28, 2025
More sneering from you hefner.
Evidence on competition bringing benefits to consumers is all around you.
Open your eyes.
July 28, 2025
Are you doing your household’s weekly shopping?
July 28, 2025
Have you seen IW’s contribution above. Now tell me what competition involving new sources, new networks, new pipes, new companies is going to put back his water bill from £270 to £190?
July 26, 2025
As far as I can see, water (like trains) is a problem all over Europe (not just UK).
It’s a waste of time over-focused on water. It’s always going to be an issue – everywhere.
Instead we should use our creativity, time and energy to figure out how to help UK entrepreneurs and companies in general in the high tech industry to do even better and helped establish UK as world’s second Silicon Valley.
July 26, 2025
68 criminals were illicitly shipped, into the UK yesterday on the 25th July from France……
July 26, 2025
I see Afghans who were imprisoned in Afghanistan by the Americans as sex criminals have…. been accepted for settlement by the UK authorities and are already here.
You really couldn’t make this stuff up.
July 26, 2025
While we accept thousands, Germany are actually sending hundreds back to Afgan …..where there’s a way
July 26, 2025
This is the result of Blair’s Afghan War that most of Parliament voted for when it was easy to see that the war was daft from the beginning (and Iraq 2). It’s scary how so many politicians can get something something so big and obvious so wrong.
July 26, 2025
Much as I believe in privatisation and competition to ultimately provide a better service I cannot see how this can happen with water without being able to find a way to increase supplies of water either by building a national grid or by making nuclear power cheap enough to provide competition through desalination plants. We can’t even get a new reservoir built. Perhaps competition for sewage treatment is feasible.
July 26, 2025
Dear Sir John,
Youir write that “There can be no downside in lifting water monopolies”. Are you sure? The basic economics of the water industry, here and elsewhere, depend on minimising charges by borrowing to cover most of capital investment .
This works because companies can borrow at noticeably cheaper rates than other industries because their income is more or less guaranteed. This was true even for the private statutory clean water companies that existed alongside the nationalised industry, which typically had no true equity capital, only a few preference shares (and therefore little incentive to invest).
If competition increases risk, or even just market perception of risk, the cost of capital will rise and the big companies would either have to raise prices or curb investment.
Basic economics also makes me wonder how and why lower prices brought
about by competition could lead to more new reservoirs being built.
Reply Competition usually lowers prices but also increases output, raising marginal profits. Look at telecoms, prices down big increase in use and in number of phones.
July 26, 2025
´Increases output’ at a time when hosepipe bans are reappearing … you must be joking …
July 27, 2025
We are back full circle to our stupid adherence to the EU Water Directive.
Conservation
Not increased capacity.
The UK followed that principle.
Result….no new reservoirs for over 30 years.
Despite the biggest increase in the UK’s population
in that same period.
You must be joking….sadly yes.
July 26, 2025
yep private sector only works when the end customer has choice…
July 26, 2025
‘Competition usually lowers prices’ – in theory.
‘Look at telecoms’ – you can’t compare telecoms to waters. They’re totally different. You’re applying too much theory – not enough pragmatic reality.
July 26, 2025
so, no driving tests available in Cornwall at all until 2026, some other counties only a few slots away from the same. its one way to get cars off the road I suppose. yet again the public sector demonstrates how absolutely useless it is.
July 26, 2025
Its a racket, the water is going up by 100% in most areas which means the company taking will double so the diviend will go up a lot but still paying say 6%. the boardroom wages and pension will rise because of bigger earning and infrastructure promise will not be meet because of the price, people will use less water so the infrastructure can be cutback and pat on the back all round for having another one over on the taxpayer.
July 30, 2025
Are you advocating a national grid for water?
I think that would be a good idea, it would cost a lot but less that HS2
Successive Governments with little imagination