Those of us facing increases in utility bills (i.e. pretty much everyone) will be pleased to learn that the water regulator, Ofwat, plans to block attempts by Thames Water to increase bills by up to 8% in 2014.
The company had planned to add £29 to the bill of each household in London and the south of England as a one-off charge to pay for the 'super sewer'. Ofwat previously criticised Thames Water over the sewer plans, saying the only reason it was needed in the first place was because the company had failed to maintain the existing sewer network properly. Shadow London minister Sadiq Khan wrote to Ofwat in August calling on the regulator to reject Thames Water's £29 charge:
“I am absolutely delighted that OFWAT have sided with ordinary Londoners and rejected yet another inflation-busting hike to water bills. Labour have been campaigning hard on this issue and this is a great example of what it’s possible to achieve when we stand up to monopolies and broken markets. This decision will help ease the cost-of-living crisis in London, but we now also need urgent action to bring down the cost of housing, transport and energy bills.”
Household bills have increasingly come under the spotlight after year-on-year price hikes combined with hefty profits being announced by utility companies. Recent proposed increases in energy costs have sparked a row between politicians and utility companies, with Labour leader Ed Miliband pledging a price freeze if his party is elected to power in 2015.
Ofwat has also issued a warning to other water companies over potential price increases. Ofwat’s chief regulation officer Sonia Brown said:
“Rising utility prices and the consequences for customers have been of concern to Ofwat for some time, particularly as average household income has fallen in recent years. If they don’t offer reductions, water company boards will have to fully explain why prices need to be maintained at current levels or even increased.”
Thames Water has yet to respond to Ofwat's latest statement, other than to say: "We will review Ofwat's draft proposals and submit our response in due course."
Photo by Ania Mendrek in the Londonist Flickr pool.