10 February 2008

Water bills in the southwest are high compared with the rest of England and the government has been under continual pressure to get them reduced.

There is no easy way of cutting the prices charged by a private company, regulated and without competition. The regulatory system hasn’t put a stop to high bills because the company can justify them to the regulator though many customers probably think regulation ineffective in protecting their financial interests. Strengthening regulation so that it deeply cuts bills would amount to the government capping the prices charged by the private company at a level that the company considers destructive to its effective and efficient operation. No government of any party is going to do that.

The Libdems have suggested a national subsidy: our bills here are reduced by getting people in other parts to pay more than the economic cost of their water supply. I agree with an equalisation scheme but have two concerns about this.

Firstly, Libdems argue that Cornwall can run its own affairs without outside intervention. They support an assembly (though a regional English one rather than a national one, I think). Yes, the people who tell us that they want devolution in Cornwall also want people elsewhere to chip in and help to pay our bills. It is incoherent for devolutionists to ask that people in, say Northamptonshire and Cumbria, be required to subsidise private water company bills in Cornwall; or at the very least this needs more arguments than Libdems have so far presented.

Secondly and more importantly, I should like to see them take this case for higher water bills elsewhere to those who will pay more. Perhaps the people of the southeast, where they face drought, will willingly pay more so that we may pay less? Why don’t the Libdems test the waters? Let them ask and let us all see what the response is.

Labour has now come up with an answer. Phil Woolas, the minister for water bills, wonders whether compulsory water meters in the southwest would deal with the high bills. No it won’t. It would simply move around the amounts individual households pay, some paying more and some less than now. Universal metering might reduce the total amount of water used and thus the costs of the company but not by much as the infrastructure for example would be the same. The company would still have to raise virtually the same amount of total money from customers so I expect the effect on bills overall would not be significant. We need to see what the estimated effect would be.

Of course universal metering might be fairer overall than the present system though not to households with young children or sick members, but in any case it does not deal with disproportionately high water bills in the southwest.

Labour has come up with an answer that is not a solution.

The Conservatives got us into this expensive mess when they privatised water supply and sewerage. It would be good to hear some ideas from them about how we find a way through the Northwest Passage of high bills. Don’t hold your breath.

related posts

Can Cornwall’s water bills be cut? 6 June 2007

Tory water bills 6 June 2008