Last week, The Economist published a piece acknowledging Britain’s “privatised utilities are a mess”, but critiqued public ownership as an alternative.
But their arguments were flawed. Here’s why. 🧵
Supporters of public ownership are told to look across the Irish Sea.
NI Water has always been publicly owned, yet it is in as much trouble as its English counterparts.
This is said to hint that nationalisation would be a “dead end”.
The piece opens with Northern Ireland (NI) Water as the exemplar of the crisis: over 20m tonnes of untreated sewage and waste yearly, Lough Neagh coated in toxic algae, 15,000 homes on hold for lack of sewer capacity.
A better comparison is Scottish Water: publicly owned since 2002, after opposition to privatisation in the 1990s led to its exemption from the programme of sell-offs and new Scottish legislation merged Scotland’s three regional water companies.
NI Water is a public body denied both a revenue base and borrowing powers.
As the article suggests, the binding constraint is the funding regime, not ownership.
Choosing NI Water over Scottish Water as the exemplar of public ownership means choosing the one case starved of funding by design and ignoring the one with a proper funding model.
The article closes by noting NI Water has complained that material underfunding is a major cause of its troubles — but NI Water doesn’t levy domestic charges.
It is funded by grant-in-aid via central government, with a capital programme set by Stormont.
From Scottish Water’s performance vs English water firms, to the failure to build major reservoirs since 1992 & the record of publicly owned water abroad — there is clear evidence that water privatisation in England is a failure.
Scottish Water charges households, borrows from the Scottish Govt and delivers lower average bills than Eng & Wales.
The piece’s own chart places it at the top of its performance table (drinking water safety 100; lower per-person usage than NI).
But water before 1989, and electricity & gas boards before 1990, charged customers directly.
They were self-financing trading firms.
This is how the Central Electricity Generating Board funded the largest infrastructure programme in British history.
