Households could in future be allowed to shop around for the cheapest water bill if more customers are on meters, the Environment Secretary has signalled.
Under the coalition Government's plans businesses, charities and public sector customers will be able to choose their water and sewerage suppliers.
But the proposal, debated in the House of Commons yesterday as the Water Bill was given its second reading, will not be extended to household customers – as it is with gas and electricity.
Environment Secretary Owen Paterson said wider competition was a worthwhile "aspiration", but that metering is nationally only about 40% and "moving closer" to universal coverage was needed first.
At £499, South West Water's average annual charge is the highest in the country thanks to botched 1980s privatisation. Bill payers in London on average pay £150 less.
It was the reason why the Government has given a £50-a-year subsidy to all households in the region. But many families in Devon and Cornwall pay more than £1,000 a year.
During the debate, Stephen Gilbert, Liberal Democrat MP for St Austell and Newquay, said the Bill was a "missed opportunity" to end regional "monopolies" afforded to water companies.
He said: "The incentive of being able to shop around for the best deal if the household has a meter may produce a double whammy.
"Consumers would shop around for better water tariffs and metering would increase, enabling households better to control their water usage and its affordability."
While welcoming the introduction of competition, he hit out at the previous Conservative Government essentially which "created a number of monopolies across the country" that has been a "key failing of that privatisation".
He added: "I have always felt that it was a privatisation too far, and precisely because it did not allow choice in the way that other privatisations of state industries did.
"There was no competition in the market and therefore no real driver for improved conditions. We see that in my constituency, much to our pain, as we still suffer from the highest water bills in the country."
South West Water has for some time encouraged households on to meters, and as a result 78% of customers pay for what they use.
Metering is important as customers would be able to compare whether rival tariffs are cheaper based on the amount of water they use.
Alison Seabeck, Labour MP for Plymouth Moor View, also criticised the failure to extend competition to domestic customers.
She said: "The Government is failing yet again to get a grip on the things that could make a significant difference to the cost of living that all my constituents are facing.
"Despite the welcome £50 rebate, the South West still has some of the highest water bills in the country.
"The amount paid by people on relatively low incomes is extremely high, and about 200,000 households are described as being under water stress."
During the debate, Mr Paterson told MPs: "I am quite clear that as an aspiration universal competition is worth while.
"Our problem is that we want to take the first step and take the wholesale route, which will bring immediate benefits and real efficiencies to major businesses, but it is hard to move down to a household level, where the gains are much smaller because of the narrow margins, until we have universal metering.
"At the moment, metering is at about 40% and we need to move closer to universal metering before we can reach the position with which ... I have much sympathy."
He added a "step-by-step approach" would allow ministers to gain experience from business competition first.
"The conditions need to be right," he said. "For example, we would need much higher levels of metering before household competition was practical."
Under the coalition Government's plans businesses, charities and public sector customers will be able to choose their water and sewerage suppliers.
But the proposal, debated in the House of Commons yesterday as the Water Bill was given its second reading, will not be extended to household customers – as it is with gas and electricity.
Environment Secretary Owen Paterson said wider competition was a worthwhile "aspiration", but that metering is nationally only about 40% and "moving closer" to universal coverage was needed first.
At £499, South West Water's average annual charge is the highest in the country thanks to botched 1980s privatisation. Bill payers in London on average pay £150 less.
It was the reason why the Government has given a £50-a-year subsidy to all households in the region. But many families in Devon and Cornwall pay more than £1,000 a year.
During the debate, Stephen Gilbert, Liberal Democrat MP for St Austell and Newquay, said the Bill was a "missed opportunity" to end regional "monopolies" afforded to water companies.
He said: "The incentive of being able to shop around for the best deal if the household has a meter may produce a double whammy.
"Consumers would shop around for better water tariffs and metering would increase, enabling households better to control their water usage and its affordability."
While welcoming the introduction of competition, he hit out at the previous Conservative Government essentially which "created a number of monopolies across the country" that has been a "key failing of that privatisation".
He added: "I have always felt that it was a privatisation too far, and precisely because it did not allow choice in the way that other privatisations of state industries did.
"There was no competition in the market and therefore no real driver for improved conditions. We see that in my constituency, much to our pain, as we still suffer from the highest water bills in the country."
South West Water has for some time encouraged households on to meters, and as a result 78% of customers pay for what they use.
Metering is important as customers would be able to compare whether rival tariffs are cheaper based on the amount of water they use.
Alison Seabeck, Labour MP for Plymouth Moor View, also criticised the failure to extend competition to domestic customers.
She said: "The Government is failing yet again to get a grip on the things that could make a significant difference to the cost of living that all my constituents are facing.
"Despite the welcome £50 rebate, the South West still has some of the highest water bills in the country.
"The amount paid by people on relatively low incomes is extremely high, and about 200,000 households are described as being under water stress."
During the debate, Mr Paterson told MPs: "I am quite clear that as an aspiration universal competition is worth while.
"Our problem is that we want to take the first step and take the wholesale route, which will bring immediate benefits and real efficiencies to major businesses, but it is hard to move down to a household level, where the gains are much smaller because of the narrow margins, until we have universal metering.
"At the moment, metering is at about 40% and we need to move closer to universal metering before we can reach the position with which ... I have much sympathy."
He added a "step-by-step approach" would allow ministers to gain experience from business competition first.
"The conditions need to be right," he said. "For example, we would need much higher levels of metering before household competition was practical."
