Lord John Redwood, a former Conservative cabinet minister who helped persuade Margaret Thatcher to embrace mass privatisation, has argued that renationalising the water industry would lead to dirtier water and even greater supply problems. Writing in response to recent water company failures during hot weather, he warned that taxpayers would face steep bill increases to fund the purchase and necessary investment in reservoirs and pipes.
Historical Failures of Nationalised Water
Lord Redwood pointed to the 1976 drought as a stark example of how poorly the nationalised water industry performed. During that prolonged heatwave, which lasted from June 23 to August 27 with a peak temperature of 35.9C on July 3, the UK experienced a 16-month period of low rainfall starting from the previous May. The nationalised industry had failed to build enough reservoirs and mend leaky pipes, leading to severe water shortages.
Hosepipe bans were imposed nationwide, and in several areas mains water was cut off entirely. People had to queue with buckets at standpipes in the street. Water rationing was introduced, with households told to place bricks in toilet cisterns and flush only occasionally. Dirty washing water was reused for toilets or gardens. Individual daily water consumption halved from 190 litres to just 95.
Economic and Environmental Consequences
The drought had severe economic repercussions. Industry faced water rationing, forcing plants to shut down or operate below capacity, which impacted employment and overtime. Farmers watched crops wither without irrigation water. The government appointed a minister for drought, which Lord Redwood likened to a rain dance, and only the arrival of rain in September and October refilled the reservoirs.
Furthermore, the nationalised industry continued pumping raw sewage into the sea from coastal towns, resulting in dirty beaches and dangerous bathing waters. Pressure on governments to permit this practice persisted until privatisation in 1989, which introduced a regulator and the first requirements to monitor and report sewage discharges.
Investment Priorities Under State Control
Lord Redwood emphasised that every pound of new investment in water counted as public spending, and the needs of the NHS or schools were nearly always prioritised over water facilities. The nationalised industry lacked both the money and the will to expand the pipe network to prevent sewage discharges into rivers and seas or to reduce water loss from leaky pipes before reaching households.
He argued that the solution is not renationalisation but a better regulator that allows more investment by the current water industry while preventing excessive returns. He advocated for water competition, drawing a parallel with the competitive gas industry that uses a single pipe into every home, suggesting the same model could work for water.
