It’s not obvious that nationalisation would solve water shortages

We await the usual insistences as a result of this story:

Thames Water refuses to rule out hosepipe ban as drought looms

Unusually dry spring could stretch supplies and force utilities to resort to restrictions

But if only the b’stard capitalists weren’t running it by taking out £80 billion in dividends then and therefore there would be copious water available. Right?

Thames has said its reservoir levels were currently about 95pc full. However, there are concerns that more unusually dry weather in the coming months could stretch supplies and force water suppliers to resort to restrictions. Rainfall in March was just one fifth of the historical average.

Clearly the answer is more reservoirs and as the country’s not built one of those in 30 years there and therefore politics has to take this in hand, right?

We can actually hear the voices of both a particular MP and a retired pop singer telling us this very thing.

And yet. Firstly, the water companies are allowed a return on their capital investments. Therefore it is in the water company interest to increase the capital investment in the system and thereby increase the amount they’re allowed that return upon. And the privatised water companies have been trying to build more reservoirs these past decades for this very reason. The incentive is there, the action has been attempted so why hasn’t it happened?

Ah:

David Johnston Conservative MP for Wantage and Didcot spoke at Prime Ministers Questions on Wednesday and raised his concerns about the Abingdon reservoir.

In Parliament Mr Johnston said: “For over two decades, Thames Water has been trying to build a reservoir in my constituency.”

He added: “This has been a shadow over the local community, who don’t think they’ve proven the need for this proposal. Does my right honourable friend agree that if a company seeks to do something like this it has to show why it’s needed, why it’s better that the alternatives, and what the environmental impact will be. They can’t behave as though it’s inevitable, whether the local community want it or not?”

So he’s agin’ it. Another local MP:

Then there is Layla Moran, the MP for Oxford West and Abingdon, who has the distinction of having been a proud and very vocal campaigner against a new reservoir in a part of England where villages are starting to run out of running water.

It’s the usual grim story: residents fighting tooth and nail against the planned reservoir on the basis of “no immediate need”, failing to account for the possibility of future need. Water companies are easy to demonise, but Thames Water has been trying to get ahead of this problem for more than ten years.

Or local councillors:

Councillors have expressed their "disgust" and fears of the "decimation" of Oxfordshire as plans for a large new reservoir gather pace.

The proposed artificial lake - known as the South East Strategic Reservoir (SESRO) - came under fire at a full county council meeting on Tuesday.

This was in response to a decision by secretary of state Steve Reed on 4 September to approve the Thames Water Resources Management Plan, which includes the controversial reservoir south west of Abingdon.

Capitalism, economics and good sense militate in favour of this - an other - new reservoirs. Politics is against this - and other - new reservoirs.

So, the solution to the political shortage of new reservoirs is to give politics more power over the building of reservoirs, is it?

Call us picky if you like but we have a strong suspicion that that is not, in fact, the correct answer.

Tim Worstall