I am looking forward to hearing what the EFRA Select Committee has to say on the Water White Paper. In my evidence to the Select Committee, I sought to differentiate between Government mandating that each and every water company legally separate its retail activities and allowing for a company that was minded to separate to be able to do so.
At one level, I am optimistic that a company should be able to separate its retail activities - simply because I am aware that Bristol Water and Wessex Water were able to establish BWBSL, a joint billing and customer service company. However, there is an important principle at stake: companies should not be required to continue to operate in a competitive market if it turns out that it would be more advantageous for both their customers and their shareholders for them to exit the retail market.
In many ways, just as it was important that Government should not mandate separation and impinge unnecessarily on property rights, it should avoid dictating who must participate in the retail market. If it does not allow for divestment of retail operations, there is a risk- a not insignificant risk- that the bills of non-contestable customers could be adversely affected.