Water companies to put small firms out of business

16 April 2006

As water companies seek permission to introduce drought orders, the threat to many small businesses that depend on constant water supplies is becoming clear.

The Federation of Small Businesses (FSB) is calling on the Environment Secretary Margaret Beckett to deny the water companies these drought orders.

Window cleaners and car washing companies in particular are at severe risk because the main resource for their trade is threatened. To comply with health and safety legislation or to reduce water consumption many have invested several thousand pounds in equipment. Many of them will have done so on credit knowing that regular business will mean they can pay off the bill. A sudden full stop in trade will leave many window cleaners not only out of business but, as they could have put their home up as collateral for their business, could hit many hard working families and cost them their homes as well as their businesses.

Insult has been added to injury by the water companies that have submitted their views to the inquiries into whether the Environment Secretary should give the green light to Drought Orders.

The submission to the Drought Order inquiry by Southern Water stated:

“Window cleaners and (non-automated) car washing service providers will be greatly impacted by the ban as they source water largely from the network system and use equipment involving a hosepipe. … The small scale of many of these businesses means that this economic activity will not cease for just the duration of the ban, but may close permanently. However, the relatively low set up costs for many cleaning businesses means that unmet demand will attract new service providers in the period after a ban. The cost to the economy from the loss of small businesses closing and subsequent loss of jobs in these areas is therefore likely to be relatively low over the medium term.”

John Holbrow, FSB National Environment Chairman, said:

“The water companies’ lack of understanding of the situation of small businesses is staggering and reeks of arrogance. Small firms could well go out of business because of their actions and their dismissal of this as a consequence is shocking.

“It is worth reminding the water companies that if they invested more of their profits in fixing leaks then there would not be a water shortage in the first place. The amount used by small firms is a drop in the ocean compared to the amount lost by the water companies through leakage. Yet small firms are threatened with closure while the large water companies continue on in their inefficient ways. Firm undertakings must be given by the water companies to the Environment Secretary that they will address the huge amounts of water lost through leakage.

“Small firms know how to keep their customers happy by providing a good service. This prevents their customers going to a competitor. It seems that the large water companies, operating locally in near monopolies, have forgotten that vital business lesson, which would have seen them go bust in any normal business setting. They need to pull their socks up and recognise that they are letting down their small business customers by not providing an effective service.”

---

Press releases, papers and documents published on this page are the intellectual property of an organisation unrelated to Central Lobby. We promote their parliamentary and political campaigning activities as they are subscribers to the Central Lobby service.

As such, Central Lobby does not edit, endorse, or attempt to balance the opinions expressed on this page. The content of press releases and other such types of content are the responsibility of the originating organisation.