Letters: Blame the regulators, not the water companies

No competition

Sir: Ross Clark’s compelling critique of the water companies comes to the wrong conclusion (‘Water isn’t working’, 13 August). He is right to say that water privatisation has been a failure, but this was inevitable given the nature of the industry – a monopoly providing an essential public service. Clark’s suggestion that there should be more competition is unworkable for the simple reason that there is too much fixed investment stretching back to the 19th century and we all have only one pipe into our homes. There are parallels with the rail industry, where a quarter of a century of trying to introduce competition has resulted in a handful of open access services and vastly higher costs. The need for regulation, price controls and social provision result in what I have called ‘faux capitalism’. Capitalists should stick to industries where genuine entrepreneurs can make more money by selling more, not by trying to outdo – often all too easily – the regulators.