THE WATER REPORT comment
Household competition is likely to be in the Treasury’s autumn statement but its profile could be muted or even kicked into the long grass.
Despite Treasury interest at the end of last year in introducing choice of water supplier for households, recent sceptical statements from consumer champion, CC Water, could pour cold water on government ambitions. The water consumer watchdog said customers would end up disappointed were the introduction of household water competition to be based on Ofwat’s “overly optimistic review.”
CC Waters’ note of caution, however, followed an unanticipated highly upbeat analysis, from Ofwat, of the benefits to customers despite its own figures that indicated savings of under a tenner a year in the best case. Even instinctively pro competition Tories might sense there are dangers to its credibility in offering vocal backing to something that could, as CC Water warned, turn out to be a “damp squib.”
The Treasury, along with the Department for Business, Innovation and Skills, kicked off the process the end of November 2015 when it declared that it foresaw the transition beginning “before the end of this Parliament.” The then Chancellor George Osborne called on Ofwat to research the costs and benefits of household competition in water supply and the regulator reported on that recently. For the Treasury to omit any mention of the household competition might reasonably be interpreted as a retreat from its earlier enthusiasm.