http://en.wikipedia.org/wiki/Tragedy_of_the_commons

Water is a common, a public good. It is used unequally by industry, agriculture and general bods. Pricing by use influences use and encourages conservation. Funding through general taxation encourages profligacy.

The trick lies in getting the price right.

But everyone is not going to use it the same – I have a flat and use a shower, you have a house and love gardening – Also when there is no cost to the user there is no incentive for anyone to reduce their water usage




It needs to make a profit so it can pay for investments. If the company breaks even and then the following year needs to spend £1million for putting in a new pipe down your street it can’t just increase the cost to the users for that year – bills would spike



Unfortunately if it’s a choice between a new hospital or fix the leaky pipe the new hospital will get the press coverage, the votes (and so the money)

Assuming the state is not willing to increase taxes then you need to either ring fence or find some other way
Also no one want to pay for something that was “free”. Its the same in the UK with the NHS. Many European countries with the health service have some charge (which you can claim back) but if that option is ever mooted there is such a storm that its dropped because we are wedded to the totally free model. However a small fee of £10 to see your GP may well reduce demand as people with a cold may just stay at home rather than bother their GP who can do nothing for them.


No it isn’t its actually saying that past politicians kicked the ball down the road (like they all do) until it became so bad that they had to do something and these lot are left to pick up the pieces. If they weren’t being forced by the EU to do this they would have done nothing

True, but the whole point of the 'social pact' that taxation is is that we all pay in as much as we r'e judged able to afford regardless of what we actually use, for the common good. You may use more water than I do but I may use public transport more than you do. Even so, society is not a 'zero sum game'; we don't all participate in society based entirely on getting as much in as we get out. That's not what society is.


Yes, if you're assuming the water system is being treated on a commercial basis. Which there's no definite reason it should. It doesn't need to make profit to make investments if it's seen by society (and it's agent the government) as a vital service that must be supplied and that supply must be ensured. You're still in the mindset of treating water supply as a business. You can treat is as a business, indeed you can actually run it as a business, but there's no absolute reason it can only be done that way.

It's not even the case that a countries economy is a closed system so money for A means less money for B. A government can create money any time it feels like it. There are consequences to that but they can be managed in a variety of ways and it's essentially a political choice which of those consequences people are prepared to accept.

Everything does not have to be a business. Many things are best run as businesses, absolutely. I am of the opinion that the things that are essential to life are not best run as a business, because businesses inevitably have to discriminate good customers from bad customers and in the case of water supply what are you going to do, cut people's water off? That['s not exactly going to play well in the press either.

I absolutely agree you will always get uproar when you start charging people for something they have previously had without an obvious charge for - as stated, people have actually been paying towards the upkeep of the water supply, they just didn't know it. But there are certain essential services that as a politician you mess with at your peril, definitely including any notion you're preparing them for privatisation, and the water supply is one of those.


True, true. But let's not assume 'privatise it' is by definition the best solution. It's simply most of our current political class's first choice.

Indeed. It could be a club, a charity, or a shared consensual hallucination.

It will still have assets worth billions and thousands of employees who expect to have pensions. It will need to invest further billions in infrastructure projects, decommission old plant, protect itself from the same lawsuits that companies do. It will need predictable revenue streams, contracts and credit terms with suppliers and customers.

It will be a corporate entity, but you can give it a friendlier name if that makes it sound nicer.