The UK Water Act has become law after being given the seal of approval by the Queen this week.

It received Royal Assent in the House of Lords, ending a two-year process, with the reform proposals initially published in July 2012.

The Royal Assent is when the Queen formally agrees to make the bill into an Act of Parliament after having completed all the parliamentary stages in both Houses.

The Government expects the Water Act to open up competition in the water market and also allow businesses, charities and public sector customers to switch water suppliers from 2017. It also hopes the reforms will help add £2 billion to the economy in the next 30 years.

The Act will help join up the national water network by making it easier for water companies to buy and sell water from each other as well as increase competition and encourage new entrants to the market.

It also aims to ensure affordable flood insurance for “hundreds of thousands” of householders in the highest flood risk areas from 2015.

Environment Secretary Owen Paterson said: “We are building a stronger, more competitive economy and our new reforms to the water market will continue to support that long-term plan.

“This new law gives businesses the freedom to switch supplier. This will bring real competition into the market, so businesses can seek out the most competitive deal and save money.”