We cannot afford more nationalisation

By johnredwood on July 20, 2026

Nationalising water polls well. That just tells us the public is fed up with sewage discharges into our rivers, rationing when we want to water our gardens, and the recent large rises in our bills. I am as critical as any of the poor performance of some companies, the failure to spend enough on new and bigger pipes, more treatment works and more reservoirs.

I part company from the public mood over the proposed solution. I remember the nationalised water industry before 1989. It gave us the name “ the dirty man of Europe” as EU rules and monitoring revealed just how much sewage discharged to rivers and to our beaches. The industry was regularly blocked from putting in new capacity and new reservoirs as every pound they spent counted as public spending which a hard pressed Treasury and over taxed voters could not afford. In the heat of 1976 some parts of the country had their mains water turned off because of a shortage, People had to queue in the street to fill a bucket from a standpipe.

Three things went wrong with privatisation. The government refused to allow competition on the specious argument that it is a natural monopoly as you only have one pipe into the home. We only have one gas pipe and one telecoms cable into the house, but that did not stop competition. Without competition the industry has lacked innovation and more pressure to keep down prices.

The Regulator decided to stop companies spending more on expanding capacity and replacing pipes in order to keep prices down. This in turn prevented good companies cleaning up their game and gave bad companies an excuse not to bother.

Successive governments then invited in very large numbers of new residents with proper though of how to provide all the extra pipes, treatment works and reservoirs they would need to have a good water service.

Nationalising will not solve any of these three problems. To solve the dirty and scarce water problems the government needs 1 to stop large net migration. 2. To introduce competition into water services 3. To instruct the Regulator to allow a major further uplift in investment programmes to speed up ending sewage discharge and water shortages .

Nationalising would require a large outlay of money on buying up the companies or on compensation for compulsory purchase. If the government confiscated the assets there would costly lawsuits and many investors would be put of off risking their money in the UK.