Most eyes in the water sector have been fixed on the opening of the non-household retail water market in England on 1 April. But if you blinked you might have missed the news that we will have to wait until at least the end of this parliament before the government decides whether to give households the same choice. We welcome this delay, which suggests ministers – much like CCWater – need more assurances.
Many water customers like the idea of choice and we believe an active marketplace could deliver tangible benefits. But there remains a gulf between what customers expect to save and what the retail water market is likely to deliver. A large majority of customers tell us an annual saving of £10 from retailers would not be enough; most expect to pocket at least four times that amount.
Even bundling water with other utilities, which could potentially shift savings closer to customers’ expectations, would fall short of the £200+ that has previously failed to tempt many energy customers. Bundling would also add to the Pandora’s box of policy issues, such as disconnection, that need to be addressed.
We can now learn valuable lessons from the non-household water market that can help shape a more watertight case for pursuing, or abandoning, household competition. It will also be useful to see if initiatives arising from the CMA’s review of energy improve customer engagement.
By monitoring the experience of small businesses from 1 April, we can understand if choice can deliver what households want.