As Britain's Leftist puritans enforce rationing, America lives in abundance

Telegraph

7 days ago

Who knew that Britain has a Museum of Water and Steam? No, not another name for our water supply system, but an actual museum, in Brentford, where Sir Jon Cunliffe launched his commission's report on the water industry on Monday morning.
The report has been heavily trailed and contains no surprises. It spells the doom of Ofwat, a regulator that has few friends, and deservedly so. It argues for better planning and more rational balancing of economic and environmental needs. And it correctly sets out that, in a privatised system with limited real competition, the next regulator will need to constrain the corporate behaviour of the water companies much more effectively.
So far, so conventional. It is unfair to blame that on Sir Jon, who is a more original and less constrained thinker than many in the British establishment. The scope of his recommendations was largely constrained by the initial terms of reference. He wasn't even allowed to look at Scotland for fear of upsetting their so-called 'government', which makes a nonsense of calling this a 'national' report.
So the fundamental trade-offs will remain unresolved. The water companies have poured in more than £200 billion of investment since privatisation to deal with our Victorian infrastructure – a genuine museum piece back in the 1980s – but it has not been enough to deal with the problems. Planning issues have meant that we haven't built a major reservoir since 1992, yet the population has increased by 10 million people since then, and is still growing.
But the bigger difficulties are political, economic, and cultural. Political and economic – because so many politicians and campaigners demand immediate, magical solutions, and simply will not understand that a nationalised water industry would face the same basic problems. Yes, the water industry has taken out an estimated £80 billion in dividends since privatisation, and in a competitive market that would likely have been a lot less. But investing and building takes time, often quite a long time. And the capital has to come from somewhere.
In a privatised industry, that capital comes from the markets, and they need a return. Rightly so: for if Rachel Reeves continues with her plans to force British institutions to invest in British industries, it's a return for you and your pension fund.
In a nationalised industry the capital comes directly from you, the taxpayer. But governments never like making people stump up now for something that will only pay off in the future. So investment gets restricted, is badly used, and then prices are held down for political reasons. That's how the state-run water industry got into such a mess by the 1980s. Indeed that's how every nationalised industry gets into a mess in the end.
The truth is that if we want a better water system, we are going to have to pay for it, either in bills or in taxes. We can't get around that problem. That's why it's so important to get back to economic growth so we all start getting richer again.
And that's why the other problem, the cultural issue, is so important. It is the anti-abundance mindset and it goes well beyond the water industry. This mentality ultimately stems from the 1970s 'Limits to Growth' report, which predicted that natural resources would run out, prices would shoot through the roof, and there would be mass starvation.
Reality has shown this to be bunk. Yet it lives on in decision-takers' minds, reinforced by the belief that climate change requires a reduction in our global footprint as human beings and use less of everything. And it's strengthened by a fundamentally elitist, snobbish mindset about economic growth, the view that growth is all about the hoi polloi buying more 'stuff' they don't need, rather than what it is: the advancement of human possibility for all us during our limited time on this planet.
Look hard – actually you don't need to look hard – and you see it everywhere. Consider the disdain for 'cheap food' and the moral panic about UPFs, surely a fabricated concept, and one whose principal benefit is psychological, allowing well-off politicians and campaigners to play Lady Bountiful telling ordinary voters how to eat. Think of the sneering at big cars, or worse still people with more than one car, the suburban lifestyle, houses with gardens instead of egg-box flats, package holidays instead of leisurely eco-travel.
Contemplate all the tedious lifestyle preaching, the hectoring of supermarkets about packaging, the determination to build houses with tiny windows and small rooms and then to ban air conditioning as it's too damaging to the environment.
This world view is inimical to economic growth and to human prosperity and well-being. The industrial revolution gave us the huge benefits of more energy and more clean water (the two are of course connected). But we have got ourselves into a mentality where we think using less of these things is good and where we ignore the connection between low energy use and low economic growth. In Britain we use nearly 30 per cent less energy and 25 per cent less electricity overall than in 2000 – despite the increase in population. The Americans use the same amount of energy as then and 15 per cent more electricity. That's a big part of the reason why they still have economic growth and we do not.
And similarly on water. Each American uses about 300 litres of water a day. Each Brit uses about 140 litres, and the Government wants to get that figure down to 105. Hence the proposals in the Water Commission report for compulsory water metering, water reuse, and social tariffs. Better get used not just to hosepipe bans, but showers even feebler than now, and dishwashers that are beautifully eco-friendly but leave your plates dirty.
Without an abundance mindset, you don't have any choice but to ration, either by price or by queue. But Britain is a wet country. We are surrounded by water which we could desalinate if we didn't restrict energy production. In Western Europe, only mountainous Norway and Switzerland get more rain. We could have enough water for everyone, if we built and invested accordingly. That should be our target. If we need to manage demand while we are getting there, that is one thing. But to tell us we will never have enough water, and it will cost ever more? I say no to that.