Our regulator, Ofwat, continued to hold consultations and discussions about introducing more competition to the water industry.

During 2010-11, Ofwat discussed contracts and codes of operation for water companies to use in the future.

Defra, the Department for Environment, Food and Rural Affairs, indicated it would publish a Water White Paper in 2011 to provide a clear direction and policy framework for water companies.

This will reflect the conclusions made by the Government following reviews of Competition and Innovation in Water Markets by Professor Martin Cave and Charging for Household Water and Sewerage Services by Anna Walker.

We welcome competition where it is in the interests of our customers and are committed to working constructively with Ofwat and the Government to ensure the proposals deliver benefits.

However, we believe there is a risk that, in its attempts to encourage customers to switch, the framework established by Ofwat could unfairly disadvantage the existing water companies.