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Consultation on Cave review recommendations

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Ref: 211/09
Date: 17 September 2009

Defra and the Welsh Assembly Government have today responded to the recommendations made by Professor Martin Cave in his independent review published earlier this year.  This consultation published today provides an opportunity to comment on proposed new regulations to extend and enhance competition and innovation in the water and sewerage industries in England and to comment on the appropriateness of the recommendations in relation to Wales.

 The proposed new legislative changes include:

  • Reducing the eligibility threshold from 50 megalitres to five megalitres of water a year in England, at which non-household customers in England can switch water suppliers.
  • Simplifying the current water supply licensing (WSL) regime to make it easier for new entrant water companies to gain access to the market and non-household customers to switch suppliers.
  • Extending the competitive retail market to cover sewerage services.
  • Separation of large water companies retail business from their water supply and sewerage business into two legally separate companies to allow competition for non-household customers.

Defra and the Assembly Government also today published their response to the Council of Science and Technology’s report on innovation in the water industry.

The consultation will run for 12 weeks.

Notes to editors

  1. The consultation package includes draft clauses to illustrate what the new WSL regime might look like in legislation. The provisions are applicable to both England and Wales, but will only be applicable in Wales if Welsh Ministers lay an order for debate before the National Assembly for Wales.  This reflects the distinctive structure of the industry and priorities in the two countries.
  2. The consultation package and response to the Council for Science and Technology report can be found at: www.defra.gov.uk/corporate/consult/cave-review.  The public consultation will run until 18 December. 
  3. Professor Martin Cave of Warwick University led an independent review of competition and innovation in water markets between March 2008 and April 2009. The Cave Review published its final report on 22 April 2009 with recommendations to the UK and Welsh Assembly Governments. Further details can be found at: www.defra.gov.uk/environment/quality/water/industry/cavereview/index.htm .  The UK Government indicated that it would consult on the implementation on the Cave Review’s recommendations in Budget 2009.  The Welsh Assembly Government has not previously commented on the recommendations.
  4. The Council for Science and Technology is the Government’s top level independent advisory body on science and technology issues, giving advice to the Prime Minister and the First Ministers of Scotland, Wales and Northern Ireland. The members are appointed by the Prime Minister.  The CST investigated the need for the water industry to invest in new technologies and innovative solutions to meet the challenges of the 21st Century. The CST report was sponsored by the Defra Minister for the Natural and Marine Environment, Wildlife and Rural Affairs; Huw Irranca-Davies MP.  The CST report can be found at http://www2.cst.gov.uk/reports/files/water-report.pdf.

 

 

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Page published: 17 September 2009