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.