The news that small businesses will be given the option to switch water suppliers will have big ramifications for the drinking water industry.
Currently only large businesses that use huge amounts of water every year are allowed to switch, but the change in laws could open this possibility to another 24,000 businesses across the UK.
This week the UK Parliament heard proposals to bring down the threshold cut off point from 50 to five megalitres.
Richard Benyon, the Environment Minister, said: “This change will allow a huge number of extra businesses to search out better water deals by switching supplier.”
The proposals have taken a couple of years to be implemented, having been made following the 2009 Cave Review into water markets. At the moment there is a monopoly on water supply in the UK
with businesses having to rely on their rates from the same companies that offer you and I water supply in our homes.
However businesses do have the benefits of lowering their water costs should they run the water supply efficiently, which effectively makes them water supply licensees.
Ofwat, the industry regulator, said that this had meant that although seven companies are registered as water supply licensees, just one of more than 2,000 eligible businesses has ever chosen to switch providers.
By the end of 2011 a White Paper will be released which details changes to the industry. Ofwat is hoping that the changes will make the industry more competitive and less open to monopolisation.
That in turn should be good news for small and medium sized business owners. The same changes were made in Scotland three year ago and are generally thought to have lowered prices and increased customer satisfaction, even though Business Stream is still the main service provider.
Currently in England the only businesses which can be said to be truly competitive are in the water waste disposal sector and the water purification systems industry.by