Water bills

Have you received your water bill yet?  Mine arrived recently and it was a whopping £434.  That's on top of my council tax bill, which is heading for £2,000.

Between 2001-02 (when water bills, having fallen after privatisation, reached their low point) and 2008-09, Southern Water's average bills have increased by nearly 20 per cent above inflation.

Now their bills have gone up by another 5.7 per cent this year - way above inflation, again.  And the company wants to increase bills further.

They've put in 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.

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?

Last year Southern Water were fined over £20 million for poor service and deliberately misreporting information.  They are leaking 83 megalitres of water.  In dry summers they are unable to maintain a regular supply.

In a speech this week I called for a new set of incentives in the water industry so that the companies, not just their customers, are incentivised to conserve water.  That would be better for our environment, too.

And I think we need greater transparency so that consumers can be clearer about how their money is being spent.  We need competition to enhance innovation and make companies more responsive to their customers.

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.