Water and Sewerage Undertakers (Exit from Non-household Retail Market) Regulations 2016

Baroness Jones of Whitchurch Excerpts

Tuesday 5th July 2016 Grand Committee

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the Minister for introducing the regulations today. I very much endorse the thanks that he and others who have been involved in this—the noble Lord, Lord Moynihan, and the noble Baroness, Lady Parminter—have extended this afternoon.

As has been said, we support in principle the extension of competition into the retail market for non-household water and sewage service so that charities, businesses and public sector organisations can switch their supplier. We accept the corollary of this new flexibility, which is that providers should also be able to exit the market, provided that the public interest test is met. For the scheme to work well, though, a number of practical guarantees have to be in place. I therefore have a few questions that I hope the Minister can answer.

First, in the submissions to the consultation there was a bit of a running theme about the incomplete asset location records making it difficult to accurately specify which undertaker is currently providing which service. Is the Minister confident that the proposed measures address that issue effectively? In other words, will there be, if you like, a land and business register that we can all have confidence in regarding who is supplying to which address and what that supply is? Is it intended that those records will be kept on a national IT system? Does the Minister have confidence that that system will be comprehensive and robust enough to store all those data properly?

Secondly, although actually I think the Minister has answered this, is he proposing that domestic business users will have a guarantee that an alternative provider will always be available, and is he saying that that will be underpinned by the public interest test that will always guarantee that? Thirdly, what requirements will be placed on companies to ensure that their customers are always made aware of their plans to exit, and that those customers are given sufficient time to find an alternative provider?

Lastly, I want to tease out what the Minister said about no company being worse off. I am thinking of isolated communities, particularly isolated businesses, that might have been on a longer-term promise that they would have expensive upgrades of water and sewerage provision in future, such as the laying of new pipes or whatever. You could imagine that an existing supplier might think in retrospect that they would rather not have that rather expensive outlay on their books. Is a guarantee built into the scheme that those expensive businesses, which a lot of suppliers might not consider economically viable, will nevertheless maintain a supplier? In other words, is there a guarantee that they will not just find that they are dumped on another supplier who is not prepared to make that longer-term investment and provide the upgrades that they might have been expecting from their original supplier? If the Minister could confirm that that longer-term investment would be guaranteed, as well as the initial supply of water and sewerage services, that would be reassuring.

Apart from that, both the noble Lord, Lord Moynihan, and the noble Baroness, Lady Parminter, raised important questions and I look forward to the Minister’s response on those matters.