Utility Bill overhaul sees water measures removed and added to new Water Bill

The UK Government has announced it will remove the provisions relating to water from its forthcoming Utility Bill. The Government will instead include the provisions in a draft Water Bill, to be published later this year.

The draft Water Bill will enable Parliament to consider proposed changes to the regulatory regime for water alongside other proposals resulting from the review of competition in that sector.

The Government also announced that telecoms provisions are to be taken from the Utilities Bill and will now fall within the scope of a White Paper.

The Department of Transport, Environment and the Regions (DETR) made the decision to drop the provisions following complaints from industry about the amount of water legislation going through parliament. Last year saw the entry into force of the Water Industry Act 1999. Meanwhile, the industry is awaiting new amendments to the Competition Act dealing with competition in the water sector.

The Director General of Ofwat, Ian Byatt had also criticised the Utilities Bill because of its provisions for consumer councils and the seeming inclusion of additional ministerial powers. Byatt argued that the Utility Bill was fundamentally flawed because it would create conflict between the Environment Agency’s regulatory role and the right of ministers to intervene in water companies’ activities as they relate to the environment.

DETR received permission for a new Water Bill in last year’s Queen’s Speech. At the time of the Queen’s Speech, plans for the Water Bill focused on competition, abstraction licences and more efficient use of water. It will now include three main elements:

  • the reform of abstraction licences. The intention to reform abstraction licensing was announced last March
  • measueres dealing with common carriage and competition
  • water provisions currently contained in the Utilities Bill

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