The case for privatisation rested on two claims, reiterated by Michael Howard, writing recently for The Economist. First, the bracing force of competition would improve utility management and hence overall outcomes. Second, it would unlock access to private capital to fund much-needed investment that would otherwise be held back by short-termism and scarcity—supposedly endemic to public ownership.

Neither claim stands up to scrutiny. Private management and weak regulation have delivered a crisis-ridden sector and chronic underinvestment. Water companies have made clear that investment will be funded mainly by increased bills, undermining the idea that private capital is essential for investment.