What is the point of a regulator if water companies can overcharge customers £1.2bn?

All we can do is plead for a regulator capable of keeping these voracious private companies under control.

Of all the privatisations carried out in Margaret Thatcher’s time, the one least popular with the public was the sell-off of 10 publicly owned water authorities to private companies. Government ministers defended the sale by explaining that rain did not simply fall from the sky and find its own way to where it was needed. They rightly pointed out that it requires a huge industry to get clean water through the tap into the home or the workplace and to take away dirty water and sewage, clean it, and pump it back again. The argument put forward at the time of privatisation, in 1989, was that private companies could carry out this work more efficiently.

This was a triumph of ideology over common sense. Though it is true that companies that compete in the marketplace have to be more efficient to survive, there is no market pressure on water and sewage companies. The customer cannot choose the supplier. Who they get depends on where they live: if it is Cornwall, it is South West Water; in Wales it is Dwr Cymru; in the North-west of England it is United Utilities, and so on. 

Nor can the customer haggle over price: they pay what the companies charge, or risk having their water supply turned off. To mitigate that problem, the government created Ofwat in 1989, a quango whose job is to set maximum prices and thus protect customers from being fleeced by these monopolies.

Read more on the website of The Independent