Tuesday 26 November 2013

Businesses in England can switch water suppliers from 2017

Businesses and public bodies are expected to save thousands of pounds when given the freedom to choose their water and sewerage suppliers from 2017, it was announced yesterday.

Debating the second reading of the Water Bill in the House of Commons, Environment Secretary Owen Paterson (pictured) said the main focus of the Bill is the reform of the water industry.

He added: “Reform will provide more choice for non-household customers and bring new entrants into the market. It will use the power of competition to drive efficiency, innovation and benefits to the environment.

“They will be able to shop around for the best deal and a package that suits them. Large water users could make savings by switching to a water supplier that offers them water efficiency advice and smart metering.”

Mr Paterson said competition in Scotland is already delivering “real benefits” to customers, with the public sector forecast to save £36 million over four years due to water efficiency and discounts.

Although household customers will not be able to choose their supplier, they will also see benefits, he said.

“They will benefit from a framework that encourages water companies to put customers at the centre of decision making or risk losing market share. Ofwat will ensure that household customers do not subsidise the costs of increased competition," Mr Paterson added.

The Bill will also establish a new scheme of household flood insurance called ‘Flood Re’ which would place limits on the price of the flood component of home insurance. This would vary in cost based on the council tax band of the property. For an average band D property, the maximum price for the flood component of the policy is projected to be £330.

When asked by the MP and former Green Party leader Caroline Lucas if the Bill will be amended to require fracking firms to have a liability guarantee for any accidents, Mr Paterson said: “I have made it absolutely clear that we will in no way dilute or diminish any of the existing regulations relating to the extraction of hydrocarbons from underground."

Referring to the huge benefits and a reduction in gas prices the US has seen, he added: “We think we will see similar merits in our economy… I think we should look at fracking with open eyes.”

Mr Paterson said privatisation of the UK water industry has seen the sector attract £116 billion in low-cost investment, enabling infrastructure to be upgraded and environmental standards to be improved.

Earlier this month the Environment Secretary urged water companies to scrap their planned price hikes for consumers and ease the pressure on householders’ finances.