§ Lord Harlechasked Her Majesty's Government:
When they will issue their consultation paper on proposals for promoting greater competition in the water industry.
The Minister of State, Department of the Environment (Earl Ferrers)My right honourable friend the Secretary of State for the Environment has today issued a consultation paper on extending competition and customer choice in water and sewerage services.
Competition is the best guarantee for consumers that they receive value for money, better services and lower prices. The Government are looking to increase progressively competition in the water industry within a strong regulatory framework designed to ensure effective protection and enhancement of water quality and the environment. The proposals in this consultation document, Water—Increasing Customer Choice, mark an important step in this process.
In summary, the proposals, which have been developed in consultation with the Director of Water Services, would:
— Introduce scope for water suppliers to compete for customers through the shared used of water mains. This "common carriage" arrangement would involve the use of an existing supplier's pipework by other suppliers in order to provide individual customers with a choice of supplier. Common carriage opportunities would allow any existing water undertaker or new supplier to 7WA compete for "large users" with a view to extending competition to other customers in the future.
—Introduce safeguards to ensure that standards of water quality and reliability of supply are maintained and to enable the Director of Water Services to protect customers of the existing water undertakers.
—Introduce similar common carriage provisions in the sewerage industry.
—Extend the existing scope for "inset appointments" which allow a new water or waste water undertaker to be appointed to supply an area within an existing undertaker's area of appointment. Proposed changes would allow such appointment to be for limited periods only and increase the number of opportunities for their use.
—Remove the existing restrictions on cross border supply to enable a water undertaker to supply water for non-domestic purposes to customers in the area of another licensed undertaker.
—Remove the water undertaker's monopoly on making connections to the water main.
The Director of Water Services intends to issue a further consultation paper on the regulation of common carriage agreements.
Competition provides opportunities for customers to choose the combination of price and service which best meets their particular needs. Where such choice does not already exist, competition offers operators the opportunity to provide it where they believe it would be profitable to do so.
Copies of this consultation paper, on which comments are requested by 1st July 1996, have been placed in the Library of the House.