Increases to household water bills a ‘bitter pill’: Chancellor

LONDON: Chancellor Rachel Reeves has described a planned average 21 per cent increase to water bills as a “bitter pill” for consumers amid the sewage pollution scandal and cost-of-living crisis.

Household water bills in England and Wales are to rise by an average £19 a year over the next five years – a third less than the increase requested by companies, under draft proposals announced by Ofwat.

Ms Reeves promised the Government will “get a grip” on the water sector, saying: “It’s clearly a bitter pill for people who are seeing today’s announcements about higher water bills.“This reflects 14 years of failure from the Conservatives to drive investment to reduce pollution, and to ensure that families are not struggling the way that they have been with the cost-of-living crisis.”

She added: “It’s why the Secretary of State for Environment, Steve Reed, has called in the 16 bosses of the water companies today.“Also, we’ve already announced tough new rules to ensure that money that is supposed to go into infrastructure cannot just be paid out in bonuses, and tougher rules around polluting as well.

“We’re determined to get a grip on the water sector so it delivers for consumers, and so that we stop polluting our beautiful seas and rivers. We will get a grip of that.”

After the meeting, Mr Reed said water bosses had signed up to an initial package of reforms “as we work towards cleaning up our water, prioritising the interests of water customers and the environment, and fixing our broken sewage system”.

The regulator said water firms had proposed increases averaging £144 over five years.For example, Thames Water’s planned rise of £191 by 2030 has been reduced to £99, while Severn Trent’s proposed increase of £144 has been cut to £93.

There are significant variations in price changes between suppliers. Under the plans, Southern Water customers will face a £183 increase over fiveyears, while Dwr Cymru customers’ bills will go up by £137 and Yorkshire Water customers will pay £107 more.

At the other end of the scale, Affinity customers will see just an £11 rise, while SES customers’ bills will fall by £34 on the previous five years.Ofwat chief executive David Black said: “Customers want to see radical change in the way water companies care for the environment. Our draft decisions on company plans approve a tripling of investment to make sustained improvement to customer service and the environment at a fair price for customers.”

He added: “Let me be very clear to water companies – we will be closely scrutinising the delivery of their plans and will hold them to account to deliver real improvements to the environment and for customers and on their investment programmes.”

A Water UK spokesman said: “Today’s announcement is the biggest ever cut in investment by Ofwat. If it doesn’t put this right Ofwat will be repeating the mistakes of the past. As a direct result, more housing will be blocked, the recovery of our rivers will be slower and we will fail to deal with the water shortages we know are coming.

“Water companies proposed to invest £105 billion because it is the minimum needed to meet the legitimate concerns we’ve heard from the public about our environment and our economy.“Ofwat is right to want to ensure customers receive value for money and that is why protections are in place to ensure customers only pay for projects that are new, necessary and value for money.”