England has the only fully privatised water industry in the world, and it has been coming under increasing pressure in recent years. Earlier this year Thames Water received a record fine for dumping 1.4bn litres of raw sewage into the Thames between 2013 and 2014. In the last general election Labour proposed replacing the existing system with a network of publicly owned regional water companies, citing a 40 per cent increase in bills since privatisation. And just last week an article in the Financial Times attacked the water system as a failed experiment largely unaccountable to the customers it serves.
Efforts have been made, however, to introduce the benefits of a free market to the water sector via competition. From April this year, non-household customers in England could switch their water and wastewater supplier. Scotland has allowed such switching for non-household customers since 2008, while Welsh customers are eligible to switch if they use more than 50m litres of water each year.
The market is now essentially the same as those for electricity and gas. Suppliers buy water from wholesalers and sell it on to consumers, competing on price and service to earn their loyalty. Electricity and gas markets have also tried to increase competition in recent years, leading to a sharp increase in the number of “challenger” energy companies, providing a growing number of alternatives to the so-called 'big six'.