Is it time to renationalise the water industry?
Leakages and outrageous pay have led to ‘knee-jerk calls’ to renationalise water companies
It’s ridiculous, said Rod Liddle in The Sun. We live in one of the wettest countries in Europe, yet much of southern England is facing “water rationing”, with a drought officially declared last week and hosepipe bans widely in force. “Sure, it’s been dry recently. But we should still have more than enough water to cope.”
The real problem is that the water companies allow three billion litres of water to leak away every day. If they can’t do better, we should renationalise them.
Indeed we should, said The Guardian. Since privatisation in 1989, shareholders have been paid £72bn in dividends and executives have been richly rewarded. Consumers, meanwhile, have seen price rises of 40%. Yet the required investment, in fixing leaks and building reservoirs, has not been made.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Many companies, moreover, have appalling records on pollution. This summer, the Thames Water boss, Sarah Bentley, will receive £700,000 as part of a £3m “golden hello” pay package, even though in 2021 her company was found to have illegally discharged untreated sewage on more than 700 days over two years. “Britain’s private utility model is broken.”
With an estimated bill of £90bn, nationalisation wouldn’t come cheap, said John Rentoul on The Independent. But there’s no need to look far for possible benefits. In Scotland, water supply is still under public control, and Scottish Water is rated the best UK water company for customer service. It certainly isn’t wasting cash on boardroom pay, either. Its boss receives around £270,000 a year, compared with an average of £1.2m for CEOs of privatised English companies.
State-run utilities ‘famously inefficient’
Nationalisation will be a hard sell to anyone who remembers the “famously inefficient” state-run utilities, said The Times. Customer service was terrible. These companies had no incentive to control costs; it has been estimated that 40% of jobs within them were unnecessary.
Besides, many of the charges levelled against the privatised industry display total ignorance of how the system works, said Robert Colvile on CapX. Take the case of leaks. Water companies can hardly be blamed for losing 20% of water when that’s the level agreed with the regulator: Ofwat calls it the “sustainable economic level of leakage”.
So if we want to bring down leakages, don’t shout at the companies, “shout at the regulator”. As for the cost to consumers, water bills have not risen in real terms for the past two decades. To be sure, privatisation has been “no panacea”, but these “knee-jerk calls for nationalisation” are made with little understanding of the facts.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Inside the house of Assad
The Explainer Bashar al-Assad and his father, Hafez, ruled Syria for more than half a century but how did one family achieve and maintain power?
By The Week UK Published
-
Sudoku medium: December 22, 2024
The Week's daily medium sudoku puzzle
By The Week Staff Published
-
Crossword: December 22, 2024
The Week's daily crossword
By The Week Staff Published
-
Failed trans mission
Opinion How activists broke up the coalition gay marriage built
By Mark Gimein Published
-
News overload
Opinion Too much breaking news is breaking us
By Theunis Bates Published
-
What Donald Trump owes the Christian Right
The Explainer Conservative Christians played an important role in Trump’s re-election, and he has promised them great political influence
By The Week UK Published
-
State capture
Opinion We've seen this in other countries
By Susan Caskie Published
-
The future of X
Talking Point Trump's ascendancy is reviving the platform's coffers, whether or not a merger is on the cards
By The Week UK Published
-
The Democrats: time for wholesale reform?
Talking Point In the 'wreckage' of the election, the party must decide how to rebuild
By The Week UK Published
-
John Prescott: was he Labour's last link to the working class?
Today's Big Quesiton 'A total one-off': tributes have poured in for the former deputy PM and trade unionist
By Harriet Marsden, The Week UK Published
-
Last hopes for justice for UK's nuclear test veterans
Under the Radar Thousands of ex-service personnel say their lives have been blighted by aggressive cancers and genetic mutations
By Sorcha Bradley, The Week UK Published