Greg Hands, the MP for Chelsea and Fulham, has called on Thames Water to do more to protect the pockets of their customers, and not to pass on the cost of building a planned Super Sewer by hiking prices above inflation.
On Monday, UK water companies announced that average bills across England and Wales are set to rise by around 2% this year, just below the current inflation at 2.7%. However while most firms are increasing prices by less than the rate of inflation the biggest company, Thames Water, will impose a 3.4% hike on the combined water and sewerage charge. This represents an £12 rise for the average household, which will come into effect on 1 April 2014. The rise for Thames customers comprises of the sewerage component of the bills, which will rise by £13 a year. Thames Water is in fact cutting the water supply charge by one pound a year.
Thames, which serves 14 million customers in and around London, had asked the regulator Ofwat to be able to impose a one-off £29 bill hike for 2014/15 but the request was turned down following pressure from Greg Hands MP and other consumer groups.
Commenting on the announced bill increase Greg said: “I am disappointed that Thames Water have insisted on hiking prices on hard pressed families by more than inflation, despite repeated requests from me and Ofwat for them to keep costs down. I am however pleased that we managed to block the proposed rise of £29 (11%), and I am grateful to Ofwat for this.”
Greg added: “This rise stems solely from Thames Water’s plans for the expensive Super Sewer, as evidenced by the fact they are cutting the water supply component of the bills. I am continuing to campaign against the drilling of the tunnel from Carnwath Road in Fulham, and against the project cost being passed on to customers. Thames should follow the good example of other UK water companies and cut prices for their customers in these difficult times.”
In October Ofwat called on all companies to consider whether they needed to take up their full permitted increases, in recognition of the difficult economic circumstances facing many of their customers. Six companies (Affinity, Anglian, Southern, United Utilities, Wessex, Yorkshire) have responded by committing to benefit customers by reducing their allowed bill increases in 2014-15.
Cathryn Ross, Ofwat Chief Executive, said: “It’s our job to make sure customers are getting a fair deal. We know that customers are having a tough time. In the last five years bills have risen with inflation, yet we are well aware customers’ incomes haven’t. We are pleased that a number of companies have heard our call, listened to their customers, and taken action. Ten million households will now benefit from lower than expected bills this April. We are now focused on getting the best deal for customers over the next five years.”
These rises are the final ones of the current five-year pricing period. Ofwat is currently analysing and challenging companies’ business plans for the period 2015-20. Final decisions on these prices will be made by January 2015, with new bills coming into effect in April 2015.