Draft Water and Sewerage Undertakers (Exit from Non-household Retail Market) (Consequential Provision) Regulations 2021

Olivia Blake Excerpts

Wednesday 22nd September 2021 General Committees

[Olivia Blake (Sheffield, Hallam) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Twigg. It is also a pleasure to serve as the Opposition Front Bencher in my first Delegated Legislation Committee, on the important issue of ensuring that non-household customers are provided with, and can connect to, the water and sewerage mains.

As the explanatory note sets out, the regulations are needed because of the unintended consequences of a previous statutory instrument in 2016. Those regulations built on the Water Act 2014 and were intended to provide for the exit of water companies from the non-household retail market, and to help to increase competition in that area. As the Minister set out, this process is still in its infancy, and I would be interested to learn what more can be done to increase that competition.

We will support the SI today, which is technical and fills in some of the gaps in the legislation. It reverses some of the 2016 SI by reinstating the duty on undertakers to provide connection services in retail exit areas. Can the Minister set out what effect removing the duty has had on people’s businesses? Have there been any unintended consequences, and have any domiciles or businesses been unable to connect to water mains or sewerage systems because undertakers are not obliged to make a connection? Do we know how many businesses might have been affected?

I am pleased that the explanatory notes say that no significant impact is foreseen, but that strikes me as an odd thing to say, and I hope the Government see their legislative agenda—even in a Delegated Legislation Committee—as impactful. I am also not sure that it is right to say that the regulations will have no significant impact. I would have thought that if a water connection company declines to provide a connection service, there must be either a business case against it or the company’s infrastructure is working at capacity in that area. If the statutory responsibility for connecting to the water mains will now, again, rest with the water provider, that must be associated with extra costs for the water provider. Can the Minister give an assurance that those costs will not be passed on to bill payers, and how will Ofwat ensure that any increases in charges are not prohibitively expensive?

We agree with reinstating the duty on water companies to make water and sewerage connections for businesses, but it underlines the need to relieve some of the stresses on water systems to ensure that they can meet demand, especially on sewerage and waste water. For example, we need some consideration of water metering by water companies, not just retailers, and we need provision for investment in sustainable drainage systems and natural flood mitigation to relieve added stresses on the system. The Government could be doing so much more to develop sustainable infrastructure.

We welcome the regulations, but it would be in the interests of businesses and the environment to consider the broader implications, as I am sure we will in further legislation.