New research suggests that the impact of introducing household retail competition in the water sector could lead to pressure on existing cross-subsidies provided by incumbent companies to more vulnerable customers, if more higher margin households switch suppliers.

The Government is planning to introduce new legislation to make economic regulators work better , open up markets and promote competition.

Ofwat’s Chief Executive has flagged up major changes coming to the UK water sector, including the need to move towards making greater use of markets.

In an Expert Focus article for Waterbriefing, Mark Hodgens, managing director at Talis UK, asks whether increased pressure on water companies to improve their reputation and customer relationships as a result of market reforms will lead to a more efficient network.

The House of Lords last night succeeded in making an amendment to the Housing and Planning Bill onSustainable Drainage Systems (SuDS) following its rejection in the House of Commons on Tuesday 3rd May.

Ofwat has said it is important that the same regulatory framework in the new retail market should apply to all appointed companies, including small companies, "otherwise the market arrangements will not work effectively for customers and other market participants."