Secretary of State for Environment, Caroline Spelman, has announced the publication of the draft Water Bill in parliament today (10 July).

Along with the Green Food Project, the draft Water Bill includes measures to strengthen the water sector’s ability to cope with the challenges of a growing population and water sustainability.

The bill also aims to offer water customers more choice by enabling them to switch their water and sewerage suppliers and to remove some of the existing regulatory requirements that act as a barrier to entrants wishing to enter the market. It is hoped that this will create a ‘more competitive market, bring new ways of working to the water sector, improve customer service and help keep the cost of bills down’.

Secretary of State for Environment, Caroline Spelman introduced the bill, saying: “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.”

Following on from legislative changes previously set out in Chapter 5 of the Water White Paper, Water for Life, the draft Water Bill includes the following measures:

• Allow all business and other non-household customers in England to switch their water and sewerage suppliers
• Remove some of the existing regulatory requirements that act as a barrier to new entrants wishing to enter the market
• Allow for Ofwat, other regulators and market participants to establish market codes to help new competitive markets run more effectively
• Help develop a joint retail market for water and sewerage services by reducing burdens for operators in Scotland and in England and to eligible water supply customers in Wales
• Introduce a more flexible upstream pricing regime, and allowing increased opportunities in the upstream supply sector
• Stimulate wholesale markets in water supply and sewerage services by extending opportunities for new entrants to offer alternative supplies and services to customers and other new entrants
• Introduce a two-tier referral system allowing some water companies seeking to take over another water company to avoid a referral by making undertakings in lieu
• Reform the connection charges regime to help facilitate housing growth

Extending to England and Wales only (but aspects are expected to extend to Scotland in the final bill), the draft Bill also outlines extending the role of the Environmental Permitting regime to include water abstraction and impounding licences, flood defence consents and fish pass approvals and also suggests changing the frequency of drought planning to a five-yearly cycle so that it aligns with other water planning cycles.

Regina Finn, Ofwat Chief Executive Officer welcomed the draft bill, saying: “This Bill is good for the customer, the economy and the environment. As well as, for the first time, giving choice to 1.2 million businesses and other organisations, the Bill is expected to benefit the economy by almost £2 billion. The reforms will help the country become better at valuing, managing and using our water. Now is the time for all players to step up to the plate to deliver the vision of the Bill – including the industry, regulators, consumer bodies and Government.”

The draft Water Bill can read on Defra’s website.