Labour seeks assurances on water charges

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Labour has sought assurances from the government that domestic customers' water bills will not be forced up by greater competition in the water industry, as peers began their detailed committee-stage scrutiny of the Water Bill on 4 February 2014.

Opposition spokesman Lord Whitty said his party backed the principle of increasing competition in the non-residential sector, which the bill sets out to do.

But he warned that this could lead to "tighter margins" for water companies, who may be tempted to recover the costs from householders.

He said he knew that this was not the government's intention, but called for a guarantee to be "embedded" in the bill to avoid any ambiguity.

Replying for the government, Lord de Mauley told peers that household customers were "fully protected" under the reforms, ensuring bills were "kept fair for the long term".

The environment minister maintained there were already mechanisms in place to prevent business customer bills being subsidised by household bills.

"We can be certain that household customers won't cross subsidise retail competition," he assured the chamber.

The bill aims to deliver more resilient water supplies and lead to cheaper and more efficient management of water resources in the longer term.

It extends competition by enabling all non-household customers to choose their water and sewerage supplier and enabling more companies to provide water and sewerage services.

It also provides for a levy-funded reinsurance scheme, known as Flood Re, to help households at high risk of flooding, and introduce a new duty for regulator Ofwat to focus on the long-term resilience of water supplies.

You can watch part two of the debate here.

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