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Drinks and price regulation

by Barrie Clarke | Shared x 0

Household expenditure creates a context for questions about action by the government in Scotland and water regulator in England and Wales.

Average spending by UK households in 2008, excluding mortgage and related costs, was £471 a week*. Among the groups of commodities and services, the highest are transport at £63, recreation and culture (electronics, reading matter, leisure) £60, and housing (including energy and water services) £53. At a finer level, the average weekly bill for public transport is £10.50, reading £6, TV/internet subscriptions £5.80, alcohol and restaurant meals £13.20 each, water services £6.30.

Such figures inevitably make us think about relative values, even if we're comparing apples and pears. For instance, the outlay on alcohol and restaurant meals – each more than twice that on water services, could provoke a range of reactions. One of the least judgmental is to reflect on the wealth of a society that can support such different expenditures.

There will always be arguments about what is essential. For most (unhappily not all) alcohol is a discretionary expense, water not. Coincidentally, price regulation is pressurising both, albeit in different directions. In Scotland, the government wants a swingeing increase in alcohol prices through a minimum price per unit. In England and Wales, the water regulator is forcing average bills down through a maximum price limit.

There is also shared ground among the responses to these policies.

In Scotland, people are asking if it is in the interests of the majority to pay more to help a small number reduce their consumption. In England and Wales, the same question arises in reverse: is it in the interests of the majority to have a small weekly saving (often pennies) that may genuinely help customers on low incomes but means improvements that would benefit everyone being or delayed or cancelled?

* National Statistics Family Spending 2009 edition



© Water UK

Thu 9 Feb 2012, 8:19
http://www.water.org.uk/home/news/blog/drinks-jan10
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