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Clause 29 will insert proposed new sections 38ZA and 39ZA into the Water Industry Act 1991. It will give the Secretary of State the power to set through regulations standards of performance relating to the water supply services provided by water supply licencees. We have amended the clause to extend the power to Welsh Ministers in relation to water supply licencees that operate in the area of Welsh incumbent water companies, namely Welsh Water and Dee Valley Water. The clause will also extend the requirement to supply information on overall performance levels to Ofwat under section 38A of the Water Industry Act, so it covers water supply licences as well.
Currently, the power to set standards of performance under section 38 of the Water Industry Act apply only to water supply services provided by incumbent water companies and inset appointees. Standards of performance are the minimum levels of service that water suppliers must meet in the normal course of business or when things go wrong. Those standards can relate to the quality of service, as well as to the time it takes to respond to complaints. They may also outline any compensation payable for failing to meet the prescribed standards of performance. In the water White Paper we committed to extending guaranteed service standards to water supply and sewerage licencees. That will ensure that customers who decide to switch will be no worse off than if they decided to stay with the incumbent water company. In any case, we anticipate that increased competition will encourage all market players to provide higher levels of customer service than those laid down by Government.
Guaranteed service standards will also create a level playing field because water supply licencees will be subject to equivalent standards of performance as incumbent water companies. That is important to stimulate competition so the market operates successfully. The clause is therefore vital to ensure the effectiveness of our retail reforms.
We welcome the clause, which goes to the heart of what we are trying to achieve. Using the Scottish model, we have seen great efficiencies. One of the measures of efficiency used by the Water Industry Commission for Scotland is not even that a person has changed their retail supplier, but that the retail supplier has changed his or her attitude. Earlier, we debated the volume of water saved in Scotland. It is worth noting that since the market opened less than a decade ago 16 billion litres of water have been saved. That is one of the great measures that we should use.