Major: `shop around for water'

CONSUMERS would be able to choose between different water suppliers, under proposals that John Major is expected to outline this week, writes Stephen Castle.

The scheme, which is unlikely to be introduced before a General Election, would involve taking the pipeline network out of the hands of individual companies. Customers would then be able to negotiate contracts with competing suppliers. The companies would commit themselves to putting specific quantities of water into the network, and charge mainly on the basis of the costs of transporting the water.

The civil servants who are working on the proposals have used the model of the gas industry, where liberalisation is already being introduced.

Mr Major is expected to trail the plans in his speech to the Conservative Central Council in Harrogate on Saturday, and later to issue a consultation paper.

But it is thought too controversial for this parliament and no legislation is likely this year. One source said: "Given that the Government will soon have a Commons majority of only one, this is almost 100 per cent manifesto territory."

Business customers would be first to get a chance to choose between suppliers; domestic users would follow later. Who would own the pipeline network, and how companies would be charged for transportation, investment and repairs, remain unresolved. A new body might be created or the companies might form a consortium.

Labour has portrayed the companies as privatised monopolies which have used their new status to increase top corporate salaries. The Conservatives feel it will be impossible to convince the public that standards have risen while consumers have no choice.