REFORM OF THE WATER INDUSTRY / Parliamentary Information Office
REFORM OF THE WATER INDUSTRY
The Parliamentary Information Office of the
Parliamentary Yearbook is currently gathering news items for major features on the effects of climate change in the next edition and has
been monitoring response to the Natural Environment White Paper and the Government’s
draft Bill, “Water for Life”
In the
Queen’s Speech on 9th May it was announced that a draft Bill will be
published to reform the water industry in England and Wales.
The draft Bill, Water for Life,
describes a vision for future water management in which the water sector is
resilient, in which water companies are more efficient and customer focused and
in which water is valued as the precious and finite resource it is. And it
explains that we all have a part to play in the realisation of this vision.
One of the
Key reforms proposed was the introduction of a package of reforms to extend
competition in the water sector by increasing choice for business customers and
public sector bodies and by making the market more attractive to new entrants
In a report published
last week, the Environment, Food and Rural Affairs Select Committee examined
the proposals to reform the water industry in England to increase competition
in the sector. MPs conclude that Defra should set a clear target date for
opening a competitive retail market for water, and should take account of
lessons that can be learned from Scotland, where retail competition has already
been introduced.
Anne McIntosh MP,
Chair of the Committee said:
"We welcome
plans to increase competition in the water industry, although we believe that
the White Paper’s proposals for reform will fail to deliver a well-functioning
retail market. We suggest how to remedy this and we look forward to examining
revised proposals in more detail once the draft Water Bill is published".
Today the plans to
reform the water industry were published in Parliament as the Government seeks
to slash red tape, drive innovation and open the market to new companies.
Under the proposals,
which have been published for pre-legislative scrutiny, all businesses and
public sector bodies in England will be able to switch their water and sewerage
suppliers, allowing them to obtain more competitive prices, improve their
efficiency and tender for services better suited to meet their individual
needs.
Evidence suggests
that opening up the water market and allowing businesses to switch supplier
could deliver benefits to the economy of £2 billion over 30 years. In Scotland,
after similar reforms were introduced, the public sector alone is set to save
around £20 million over the next three years.
Secretary of State
for Environment, Caroline Spelman said,
“This draft Bill will
create a modern customer focused water industry and for the first time all
businesses and other organisations will be able to shop around for their water
and sewerage suppliers.
“By slashing red tape
we will also stimulate a market for new water resources and incentivise more
water recycling.
“This will ensure
that the water industry continues to provide an affordable and clean water
supply which is essential for the nation’s economic growth while at the same
time protecting the environment for future generations.”
Businesses, charities
and public organisations with multiple sites will also be able to receive just
one combined water and sewerage bill for all their offices and buildings across
England and Scotland.
Regina Finn, Ofwat
Chief Executive Officer said:
“This Bill is good
for the customer, the economy and the environment. As well as, for the first
time, giving choice to 1.2 million businesses and other organisations, the Bill
is expected to benefit the economy by almost £2 billion. The reforms will help
the country become better at valuing, managing and using our water. Now is the
time for all players to step up to the plate to deliver the vision of the Bill
– including the industry, regulators, consumer bodies and Government.”
The draft legislation
will remove current regulations which act as a barrier to new entrants wishing
to enter into the water and sewerage market. Currently any new entrant needs to
negotiate with up to 21 water companies before entering the market. Under these
changes there will be no need to do this as Ofwat will set out standard terms
and conditions for companies to follow. It will also encourage existing
companies to look at offering alternative supplies and services.
The legislation will
also make it easier for bulk water trading within the industry, allowing water
companies to work more closely to find long term solutions to water security
issues.
Increased competition
in the wholesale market will give water companies an incentive to come up with
cheaper, more sustainable solutions to sourcing water.
The Bill will also
make the costs of connecting new developments to the water and sewerage system
more transparent. Developers will benefit from the extension of environmental
permits to include water abstraction licensing and flood defence consents –
reducing the red tape around environmental regulation.
The
Parliamentary Information Office of the Parliamentary Yearbook will continue to
report on the progress of the White Paper and the impact on competition and UK water
supplies as we go through the months ahead.
6th July 2012
Post a Comment