Industry NewsThe water industry needs to be reformed in order to safeguard supplies and services, according to the new Water White Paper. The proposed legislative changes from the Department for Environment, Food and Rural Affairs (Defra) do however stop short of the large structural changes the regulator and other stakeholders have been advocating. The White Paper includes proposals to enhance the size of the current competitive water supply market, as well as modify its operation along similar lines to that operating in Scotland. Indeed, Defra is advocating a combined retail water market to enable consumers to secure deals that cover all of Scotland, England and Wales.
The new White Paper – entitled 'Water for Life' – takes on board the findings of independent reviews into competition, innovation and charging structures in the water industry. Its main focus is to protect the water industry and supplies in the face of increasing environmental stress. The Government has highlighted that the UK is likely to see increasing instances of water tightness. This would be the result of unchecked demand growth and climate changes.
Amongst the changes in legislation being proposed are modernisation of water abstraction rules, the introduction and regulation of social tariffs to help water affordability, as well as explicitly make moves to cut water charges in the South West.
Defra meanwhile is also keen to see business and public sector customers negotiate with new entrants and their current suppliers for better prices and services. As such, it is removing barriers to entry, such as the controversial 'costs principle' in favour of a wholesale water price. All these proposals still need to go through a consultation phase as well as being discussed in Parliament. As such, the modifications in the current competition regime – many of which were mooted close to five years ago – will still take some time to action.
Launching the White Paper, Environment Secretary Caroline Spelman, commented, "Currently we enjoy clean water at the turn of a tap, and watch it drain away without a thought. But parts of England actually have less rainfall per person than many Mediterranean countries. Making sure we've got enough water for everyone is going to be one of the major challenges this country will have to deal with in the years ahead. We can already see the type of problems we may face, with parts of Britain still in drought even though we're in December. With water expected to be less predictable as time goes on we all have to play our part in ensuring our water supply remains secure."
The White paper can be downloaded HERE.