According to the government, the Water Act 2014 will reform the water industry, making it more “innovative and responsive to customers” while increasing the resilience of water supplies to droughts and floods.
Mark Powles, chief executive of Business Stream, the incumbent retailer in Scotland, where the market opened to competition in April 2008, welcomed the legislation, claiming customers have saved more than £36 million from their water bills by reducing water usage.
“Competition delivers tangible benefits, and the market in Scotland can point to plenty of notable success stories. There’s every reason to expect customers in England will be able to use the choice they’ll have to drive the same kind of benefits,” he said.
The Bill also included measures to address the availability and affordability of insurance for properties at high risk of flooding.
The Water White Paper, Water for Life, presented to the government by the then environment minister, Caroline Spelman first called for a new Water Act in 2011.
Other measures laid out in the Bill will establish a cross-border arrangement with Scotland, enable businesses to provide new sources of water or sewerage treatment services and make it easier for water companies to buy and sell water from each other.
In addition, a new resilience duty will be placed on regulator Ofwat and ministers will be given powers to set the level to which a water company needs to plan to cope with droughts.
The government also aims to encourage the use of Sustainable Drainage Systems (SuDS) by clarifying that their building and maintenance can be a function of sewerage undertakers.
Last minute amendments to the Bill included the provision that water companies would be able to exit the retail market. Calls from Labour to include a National Affordability scheme – to set a UK-wide standard for social tariffs – did not make it into the legislation.