What to do about Water

The governments of Margaret Thatcher and John Major created utterly dysfunctional models for some public services. Private sector monopolies. If you give a privately owned company monopoly rights and duties in a geographical area it will exploit its rights and ignore its duties. Exploiting means putting dividends and executive remuneration before investment and good service. That’s human nature.

We saw with Railtrack what happens when a privatisation ideology damages what was clearly an essential national asset. Indeed across the railway system as a whole commercial rather than public service considerations dominate.

The Water sector is an essential public service. This is not necessarily an argument for nationalisation. London buses, for example, offer good service despite being privately owned and operated. But this is within the context of an integrated public transport system in the capital run in the public interest.

Public interest is the key. It may be, as for the London buses, that a public/private partnership would work for Water. I have my doubts about this. Regulation has comprehensively failed and there has been underinvestment and borderline corrupt practices along the way. Fiddling on the margin with improved regulation whilst the whole model is defective won’t take the sector forward.