The consensus about Britain’s water companies, says Robert Colvile in The Sunday Times, is that they’re greedy, recklessly polluting and appallingly inefficient. Thames Water “totters on the brink of collapse”; the head of the industry trade body opened a recent speech with a “self-lacerating apology for its collective sins”. But allow me to “attempt the seemingly impossible”: a defence of the system. The first thing to understand is that water firms aren’t laden with debt because of fat-cat bosses – it’s because the regulator, Ofwat, prevents them from increasing consumer bills to cover their costs. That’s why Thames Water is in so much trouble now: its owners were forced to borrow vast sums precisely because they couldn’t extract the cash from customers.
Another misconception is that the water companies never put any money into infrastructure. In fact, “Britain spends more on its network than any other European country, and is about to spend more still”. Since privatisation – supposedly the root of all evils – bills are £120 a year lower than they would otherwise have been, and leakage is down by a third. As for all those sewage spills, they’re down to our Victorian “combined sewers”, which can’t separate rainwater and domestic waste – a system that would cost up to £600bn to upgrade. This country hasn’t built a new reservoir for 40 years, “not because water companies don’t want to, but because nimbys won’t let them”. Yes, there’s a lot wrong with Britain’s privatised water sector. But they’re doing a much better job than they get credit for.