Businesses in England will be allowed to switch water suppliers in the future and this could potentially save £2 billion for the economy, it was announced today.
The news comes as Environment Secretary Caroline Spelman launched the draft Water Bill this afternoon in a bid to reform the water industry by driving innovation and opening the market to new companies.
Under current rules, only businesses which use large volumes of water have the choice of switching suppliers and any new supplier must negotiate with up to 21 other companies before entering the water market. Defra said the new Bill will allow companies to get more competitive prices.
Ms 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.”
Analysts welcomed the Bill but said the Government, industry and regulators need to do a lot more work for it to be successful.
Bill Easton, Utilities Director at Ernst & Young said: “The draft makes it clear that there is a very substantial programme of work required for the reforms to be successful.
“It is vital that the new high-level group leading this work ensures that all parties are quickly aligned on the necessary roadmap and timeline, as well as making sure that the work does not take any longer than necessary.”