The new interim report also calls for retail divisions of water companies to be made legally independent and for more to be done to encourage new water and wastewater suppliers to enter the market.
The review conducted by Professor Martin Cave has said it is hopeful its recommendations can reduce costs, improve water efficiency, and increase service levels for customers.
Scottish organisations have been able to choose their own water and sewage system suppliers since 1st April 2008.
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Commenting on the interim findings, the chief executive of the Water Industry Commission for Scotland (WICS), Alan Sutherland, said: "We applaud Cave's findings in favour of the introduction of competition for non-domestic water customers in England and Wales and believe it will encourage much needed innovation and bring wide-ranging environmental and cost-saving benefits.
"Given the size and complexity of the water industry in England and Wales, the introduction of competition will take some time to achieve and we believe that Cave’s proposed model of a step-by-step introduction will be most effective in constructing this competitive framework. This approach will also ensure that no single group of customers need be adversely affected during the introduction of competition."
"We have proven that competition in Scotland works and delivers tangible benefits for everyone. But delivering real change that is in the interests of customers needs vision and commitment from all parties. We believe that England and Wales can also benefit from such an approach and we look forward to seeing Cave’s full report and recommendations in 2009."
The Cave Review is set to issue its final report to the UK Government in spring 2009.
(GK/JM)
