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The argument for deregulation in the water industry is compelling, the act of Parliament has been passed and whilst large business customers have enjoyed some choice in recent years, in 2017 the whole business market will be opened up in England for the very first time (Wales has opted out of deregulation) In 2008, Scotland became the first country in the world with a deregulated water market. Since then, the country has boasted about a number of significant improvements including in water delivery, in customer service and in generating efficiencies – just like in other deregulated markets like gas and electricity. While larger British business customers (using more than 5 mega litres at any one site) have enjoyed a degree of choice about their supply some time, in 2017 the whole business market will be opened up in England (but not Wales).
Why Water Deregulation Is a Good Thing for Businesses
Fundamentally, the argument for deregulation centres on introducing more competition into the water market. The water market in England has mostly operated as a series of regional monopolies like Thames Water, Northumbrian Water, Yorkshire Water, Wessex Water, South West Water and Southern Water. By introducing more competition into the marketplace you increase the incentives for suppliers to reduce costs or provide a better service. Ultimately, this will lead to more benefits for consumers. In addition, businesses which operate across multiple sites and different regions can simply deal with one supplier instead of lots of separate ones. And if they have a particular problem or disagreement with one supplier, businesses have more power of recourse to switch away. Business customers are more sensitive to switching suppliers if they can get a better deal. What’s more, business customers are also more likely to use some of the smaller suppliers who can often deliver utilities at better rates than the bigger companies.
Industry Changes Ahead
When full UK deregulation hits in 2017, businesses in England will get the same power as Scottish businesses to choose who supplies them with water, waste water and drainage services. This more competitive marketplace has not fully evolved yet, but as the deadline creeps closer it’s clear that some changes are on the way. Competent wholesalers should emerge and be capable of contracting with retailers quickly, transparently and fairly. If they fail to do this then buyers will look elsewhere. For more information on changes to the water market, or to learn how industry changes might impact your business, call one of our trusted advisors. U4Utilites will help your business get prepared. In order for U4Uillites to prepare you for Deregulation, please Call 01202 80 50 90