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Last Updated: Thursday, 5 August, 2004, 05:07 GMT 06:07 UK
Water bills to rise
kitchen tap
Would you pay more for this?

Householders could be paying around 13% more for their water and sewage over the next five years.

Water companies in England and Wales have been told that's the amount they'll be allowed to stick on the average bill, after putting in a claim to raise prices by around 30%.

The ruling, by the regulator Ofwat, may come as a blow to their schemes for improving water standards - but it'll mean more pain for consumers who've seen steep price rises in the years since privatisation.

And it's likely the worst of the price increases will come sooner, rather than later in the five year plan, putting an average of 33 on a typical household bill.

  • This morning, Breakfast asked: should we pay more for our water?

    We were inundated with your e-mails - many of them complaining that bills are already too high.

  • Our business presenter Declan Curry put some of your views the Director of Water Services at Ofwat, Phillip Fletcher

    In particular, many of you asked why the water companies' shareholders couldn't stump up the cash for investment in infrastructure.

    "I am concerned that shareholders should not make excess returns, but they do need some return so they continue to invest, to enable companies to make improvements for all of us" he told Breakfast.

    The extra money will be used to improve water quality and environmental standards.

    "Customers need to finance investment because so much needs to be done," he said

  • We also talked to Pete Bowler from the consumers' group Waterwatch.

    Pete Bowler of Waterwatch at a reservoir in Derbyshire
    Waterwatch says shareholders should pay upfront
    "This sounds like good news, but the devil is in the detail," he told us.

    "These are increases over and above inflation.

    "Customers are being asked to pay up-front for investment which should be funded by shareholders and then recouped over the 50-60 year lifetime of those assets."

    In the years since privatisation, water bills have already increased substantially.

    The water companies say that's because they have needed to spend massive amounts on cleaning up rivers and beaches to tough new environmental standards - and on updating largely Victorian sewage systems.

    Average water bills
    Southern: 259 will increase to 303
    Yorkshire: 243 will increase to 279
    Northumbrian: 232 will increase to 244
    Severn Trent: 221 will increase to 257
    Thames: 211 will increase to 244

    They had asked to increase bills by an average of 29% in five years. But the regulators look set to allow around half of that figure - after consultation.

    The need to renew much of the country's ageing sewage system was underlined in London earlier this week, when torrential rain overloaded the capital's sewage system.

    Thousands of gallons of raw sewage were flushed into the Thames, causing the death of hundreds of thousands of fish.

    At the moment, Thames Water bills are the lowest in England and Wales - although the company would have liked to increase them by 40% over the next five years.

    Consumer groups fear that any increase in water bills will hit those on fixed income particularly hard: the elderly and families with small children may find it difficult to cope.

    Ofwat announced its preliminary decision on water billing this morning to the Stock Exchange this morning.

    The regulator will then consult with government agencies, Water UK and Watervoice before announcing a final decision on billing on 2 December.

  • Do we take our water supply for granted - or do we already pay too much for one of life's necessities? Whether you pay water rates or have a meter, tell Breakfast what you think

    Your E-mail address
    Where you live

    Disclaimer: The BBC may edit your comments and cannot guarantee that all e-mails will be published.

    Water bills
    The BBC's Quentin Somerville reports for Breakfast

    BBC Breakfast


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