Dec. 13, 2011
UK environment secretary Caroline Spelman warned at the launch of the long-awaited Water White Paper that Britain faces a future of water shortages and lasting environmental damage, including some rivers running dry, unless attitudes to water use change.
The Water for Life paper outlines plans to modernise the abstraction regime, sets out plans to reform the water industry and deregulate water markets, and a pledge to reduce the limit at which businesses can change supplier down to 5MLD and ultimately to zero, which will require legislation.
The White Paper also proposes removing barriers that have discouraged competition, for instance by having separate wholesale and retail water pricing.
It also focuses on local interconnections, suggesting water companies should consider where water trading and interconnecting pipelines could help to secure affordable water supplies.
Water companies will be able to introduce new social tariffs, and there is a proposal to find new ways to resolve bad debt. The ‘historic unfairness’ of water infrastructure in the South West is also tackled with an annual refund to customers.
A draft Water Bill will be published in early 2012 and a Water Bill will be introduced ‘as soon as Parliamentary time allows’.
Generally the reaction to the paper has been favourable, with some caveats. The WWF welcomed it, though its freshwater policy officer Rose Timlett noted that ‘one key area that still needs to be addressed is how to support the comprehensive roll out of water meters.Combined with social tariffs and water efficiency measures this is the cheapest and fairest way for people to reduce their water usage, and the government needs to set out more detail on this going forwards.’
Mike Woolgar, managing director of environmental and water management at Atkins, called the White Paper ‘an early and welcome step on a much longer journey’, warning that ‘revising the abstraction regime is a necessary precursor to more efficient water allocation, but will be complicated by the unwillingness of many incumbents to be disadvantaged, especially if some of their spare water which otherwise might be tradable is removed without compensation.’ He also expressed surprise at the lack of emphasis on metering.
Ernst & Young’s utilities director Bill Easton noted: ‘The recognition of the need to reform abstraction arrangements will be welcomed, although given the time that this is likely to take, we are a little surprised that there has not been more emphasis on the implementation of bulk water trading in the near-term.
‘The Paper has also struck a sensible balance in its approach to retail competition. It was always likely that the government would want to give business customers in England and Wales the same opportunities as those in Scotland.’
The Chair of ICE’s water panel Michael Norton said the Institution welcomed the government’s recognition of the value of water to society and for economic growth, adding: ‘However, we would have liked to see more acknowledgement of the UK’s high dependence on “virtual water” embedded in imported goods.’