Firms warned water trading scheme could be on the cards

WEST Midlands manufacturers are being told to prepare for a water trading scheme as parts of the region face the worst drought since 1976.

The warning comes from Stoke-on-Trent sustainability specialist Ceram after environment secretary Caroline Spelman hosted a drought summit with water companies, farmers and wildlife groups last month.

Ceram believes the looming shortages make the introduction of a water trading scheme more likely in the longer term, with price rises almost inevitable in the shorter term.

Under such a trading scheme, water use could be capped and manufacturers needing additional supplies would be forced to buy unused quotas from other firms. Water-intensive sectors such as food and drinks manufacturers would be most affected by the system, according to Ceram.

With parts of the Midlands experiencing the lowest rainfall levels for decades this winter, the environment secretary said public supplies are likely to be affected unless there is substantial rainfall by the end of April.

Joe Flanagan, sustainability principal at Ceram, said: “All the signs are that ministers are taking Britain’s water supply problems extremely seriously – and rightly so.

“Scarcity of water puts an upward pressure on prices and the need to invest billions in infrastructure like pipework and new reservoirs will undoubtedly drive up bills.

“Manufacturers need to think about this now rather than when they see their costs going up.”