* Call for more urgency in addressing flood issues
* Select Committee publishes report on draft water bill
* Says it may lead to higher bills, investor uncertainty
* Govt minister to look at recommendations closely
By Lorraine Turner
LONDON, Feb 1 The UK government came under fire
on Friday from a committee of members of Parliament for dragging
its heels on flood protection, after 2012 went down as the
second wettest year since records began and floods wreaked havoc
across the country.
The Environment, Food and Rural Affairs Select Committee
criticised the government's approach to tackling flooding in a
review of the government's draft water bill which proposes
market reform among water utilities.
"The government has been too slow to implement changes that
would protect homes and businesses from the shattering effects
of flooding," said the committee's chairwoman Anne McIntosh.
"New laws will increase competition in the retail water
market and while we welcome those changes, government must get
on with implementing changes that would reduce flooding, many of
which were recommended nearly five years ago," she added.
McIntosh noted that solutions existed to reduce the impact
of flooding, which is set to be Britain's biggest climate risk
this century according to government-funded research last year.
"Successive governments have not had the mettle to put them
(solutions) into practice," McIntosh said in a statement.
The UK Environment Agency said this week that 1.3 million
people were at risk of coastal flooding in England and Wales.
Damage is seen costing as much as 12 billion pounds ($18
billion) a year by the 2080s if nothing is done to adapt to
Water Minister Richard Benyon said in a statement on Friday
that he would look at the recommendations closely.
"As unpredictable rainfall and population growth puts an
increased pressure on our water supplies we need a water
industry that is fit for the 21st century," he said.
The government outlined plans last year to make it easier
for water companies in England and Wales to merge, new players
to enter the market and businesses to switch suppliers.
It said the reform of the water industry could save the
economy 2 billion pounds ($3.2 billion) over the next 30 years.
However, the committee said the draft bill was too vague and
recommends better protection for consumers to be included in the
legislation proposals, particularly from the introduction of
more competition for business customers.
The lack of detail could result in higher water bills for
households as well as higher financing costs for water
companies, such as United Utilities and Severn Trent
"We want to see provisions in the legislation that protect
consumers and we do not accept the government's arguments that
those protections would undermine investors' confidence in the
water industry," said McIntosh.
Overseas infrastructure funds have snapped up investments
in British water companies in recent years, lured by their
reliable income streams.
But recent regulatory uncertainty may have taken the glow
off the sector, with Britain's water regulator Ofwat forced to
make a u-turn in its proposals to make water company licences
more flexible at the end of last year.
In response to the report on Friday, Ofwat agreed with the
committee's findings that all parties must come together again
to work out how "upstream" competition can work in practice to
maintain investor confidence in the sector.
Water UK, a body which represents the water companies,
agreed that clarity was necessary to avoid any unintended