Water Bill

Andrew Miller Excerpts

Monday 25th November 2013 Commons Chamber

[Mr Paterson]

I have no doubt at all that we want more efficient water companies with more investment, which undoubtedly will lead to a cheaper product.

We are already seeing the first signs of a competitive market. In September, to answer my hon. Friend’s question directly, First Milk became the first multi-site customer to switch to Severn Trent Costain. The two companies are working together to improve First Milk’s water efficiency and lower its environmental impact, but these opportunities are limited at present because they are open only to the largest water users. The Bill will simplify the existing regime, providing clear rules of access and non-discriminatory pricing to attract new entrants to the market. We expect this expanded retail market to open in 2017.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

I take the right hon. Gentleman’s point about expanding the market and the smaller companies. However, the Canal & River Trust, a body supported on both sides of the House, is concerned that clause 12 will impact negatively not just on its ability to deliver its charitable objectives, but on its navigation functions and income. Will he have a close look at that and agree to meet representatives of the Canal & River Trust to discuss their concerns?

[Mr Paterson]

I thank the hon. Gentleman for that interesting question. We would be happy to meet the Canal & River Trust—it would be appropriate for the Under-Secretary of State, my hon. Friend the Member for North Cornwall (Dan Rogerson), to do so, as he is taking the Bill through the House—but I think that it is being negative. With its wonderful and virtually national network, it has a real opportunity, because if we open up more upstream providers we will need a vehicle for moving water around. I take a very positive view of this for the Canal & River Trust. We are definitely happy to meet it.

We are not at this point offering choice to household customers. We are taking a step-by-step approach, gaining experience from a competitive business retail market first and reducing any risk to investment in the sector. We have seen in Scotland that competition tends to be around value-added services, rather than price, making the case for household competition less attractive. The conditions need to be right. For example, we would need much higher levels of metering before household competition was practical. Although household customers will not be able to choose their supplier, 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.

I know that some water companies have asked for the option of exiting the retail market. The problem with that approach is that household customers could lose out because they would not have the ability to move to a new supplier, and if the incumbent water company keeps its household customers but disposes of its business customers, the householder is stranded with a company that has little incentive to provide a decent service. We are not prepared to risk that.

The Bill will also make it much easier for new businesses to enter the water market to provide new sources of water or sewage treatment services, known as upstream services.