Soaring water bills "simply unacceptable"
Arundel & South Downs MP Nick Herbert has criticised Southern Water’s plans to increase bills by over 20 per cent above inflation over the next five years.
His comments came as customers across West Sussex received bills from the company with an increase of 5.7 per cent this year.
Southern Water has submitted a bid to Ofwat, the water regulator, to increase bills by the highest amount of any water company, taking the average bill to £446 by 2014-15, a rise of 47 per cent above inflation in little over a decade.
A final business plan will be published by Southern Water next month but consumers will have to wait until November to find out whether Ofwat are prepared to support its proposals.
Last year, Southern Water was fined over £20 million for poor customer service and deliberately misreporting information. The company is losing 83 million litres of water a day through leakages and, in dry summers, are unable to guarantee a regular supply.
Criticising the proposed rises in water bills, Mr Herbert said: "This is simply unacceptable. I've raised this issue with the company and the regulator, and I hope that Ofwat will pare the plans back. Southern tell me that the increases are necessary to fund a £2 billion programme of ‘service and infrastructure improvements'. But are they?
"Why are other water companies with similar challenges bidding for so much less? And how can we, as consumers, judge whether the rises are justifiable or not?"
Mr Herbert added: "People on low incomes are struggling to pay their water bills. We shouldn't be adding to their problems, least of all in a recession."
Mr Herbert, who is the Shadow Environment Secretary, made a speech on water policy at the European Policy Forum in London last week (23 March) in which he called for companies, not just customers, to play their part in conserving water supplies, with "stronger action" to prevent leaks, better co-operation between companies and measures to reduce the impact of taking water from the environment.
Mr Herbert also called for greater transparency so that consumers could be clearer about how their money is being spent and said that increased competition should be used to encourage innovation, enhance efficiency and make companies more responsive to their customers.
And he said that while customers need to play their part in reducing unnecessary usage, they must be protected from "ever-rising bills".
Notes for Editors
1. Southern Water, which serves customers across West Sussex, announced in August that it plans to increase bills each year by an average of 4.5 per cent above inflation from 2010-11 to 2014-15, beginning with a huge 14.8 per cent increase above inflation in 2010-11. The rises are amongst the steepest announced by water companies in England and Wales.
2. For a copy of Nick Herbert's speech on water policy at the European Policy Forum in London on Monday 23 March, visit http://www.conservatives.com/News/Speeches/2009/03/Nick_Herbert_Speech_to_the_European_Policy_Forum_on_water_policy.aspx.
3. To compare the proposals of water companies across England and Wales, visit http://news.bbc.co.uk/1/hi/business/7552564.stm.
4. For the website of Ofwat, visit http://www.ofwat.gov.uk/.
5. For the website of Southern Water, visit http://www.southernwater.co.uk/default.asp.