EU water standard directives scrapped

SHARES IN the privatised water companies are likely to be boosted today by the news at the weekend that the Government has secured the scrapping of European Union directives on drinking and bathing water standards.

But the moves may have only a marginal effect on the bills faced by consumers as all the 10 privatised utilities are already committed to large-scale capital investment programmes until the end of the decade.

oreover, the Urban Waste Water Directive, which has the most profound implications of any of the EU measures, is not included in the package of directives to be scrapped.

The Government also said that the repeal of the directives did not mean that Britain would be reneging on commitments to higher water standards. But the deal could allow the water companies a longer timespan in which to achieve quality targets.

Government officials stressed that the main purpose of the agreement to scrap the directives was bureaucratic rather than a matter of policy. The Government wants to entrench the principle of subsidiarity, whereby individual member states can be interfered with less by Brussels.

The agreement on the directives could have a particularly big impact on companies such as South West Water, whose customers face the highest bills in the country. South West is spending pounds 2bn by the end of the century to clean up its long coastline and improve its infrastructure.

But a spokesman said it was unlikely that the capital expenditure programme could be slowed significantly.

The water companies have lobbied for a slowing of the pace of improvements, arguing that the huge investment programmes required eventually bring dramatically diminishing returns.

The Government and the water industry regulator, Ofwat, have both said that water companies should not go beyond the minimum requirements in an attempt to keep down water and sewage charges.

An EU spokesman last night said the Commission was reviewing two water directives but only in an effort to update them. 'If we make a new proposal, it won't be to weaken standards, particularly those relating to health.'