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Water Competition Must Benefit Customers

The Consumer Council for Water today (18 November) welcomed the recommendations put forward in Martin Cave’s interim report on competition in the water industry, and is echoing the call to get competition right for business customers first.

Dame Yve Buckland, Chair of the Consumer Council for Water, said: “Competition to date has not served business customers well. While competition for some business customers has existed since 2005, no one has switched supplier. Only about 2,000 businesses are currently eligible, and there is little financial advantage for them to make the change. Business customers have told us that they are frustrated at this lack of progress.”

Research launched last week by the Consumer Council for Water and Ofwat has shown, however, that household customers have mixed feelings about whether or not they would like the opportunity to choose their water and sewerage provider.

According to the research, fifty seven per cent of customers said that they supported the principle of competition in the water industry. When they understood that in practice some customers could be worse off, only a third of those surveyed still supported competition, one third did not, and the rest were unsure.

Dame Yve continued: “If competition for household customers is to happen it needs to live up to customers’ expectations, deliver tangible benefits, and those benefits need to outweigh the costs.

“While ninety per cent of customers said that they are happy with the service they receive from their supplier, they are not as happy about the cost. Those customers that welcome competition believe that it would lead to lower prices, with most saying that they would expect to save 20 per cent by switching supplier.

“The government needs to decide if competition in the water industry could realistically deliver that. If not, customers will need to be convinced of how competition would, in practice, benefit them. They will also want assurances that lessons have been learned from mistakes in other sectors. Less than half of those surveyed (forty eight per cent) thought that competition in gas and electricity has been good for customers.

“We look forward to working alongside Ofwat and government on their reviews of competition, so that the views of consumers, business and domestic, form the basis of any changes to the system.”

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