Water shares have slipped back after government proposals to introduce more competition into the industry and allow consumers to choose their supplier.
In a draft bill, the government has proposed removing barriers which impede new entrants to the water and sewerage markets. At the moment they have to negotiate with 21 water companies before they can begin business, but the plan is for regulator Ofwat to set out conditions for businesses to follow instead.
At the same time the draft bill outlined changes to maker it easier for water companies to merge. Environment secretary Caroline Spelman said:
This draft bill will create a modern customer focused water industry and for the first time all businesses and other organisations will be able to shop around for their water and sewerage suppliers.
So in a rising market Severn Trent is down 9p at £16.82 and United Utilities is 0.5p lower at 676p.
