Labour set to bring in curbs on water profits

Water companies' profits could be curtailed under a Labour government, the party's environment spokesman announced yesterday.

Labour's second annual report on the water industry, published by Frank Dobson, says that the party is not prepared to allow soaring profits coupled with higher bills and lower investment.

The report attacks price levels, which it says have gone up by more than 40 per cent while the number of incidents in which customers have had their supply cut off has also grown. Last year the number of interruptions lasting more than 12 hours doubled to more than 130,000.

Labour's report, based on three official publications released last week, says that prosecutions of water companies for polluting streams, rivers, lakes and reservoirs is now running at a rate of three per month.

At the same time, profits have totalled pounds 11.1bn in the six years since privatisation, and the heads of water companies have voted themselves more than pounds 20m in pay and perks this year.

Capital investment in water has been cut by pounds 361m in the first six years of privatisation, while profits have risen in every year but one. Total investment last year was pounds 2.3bn.

Mr Dobson said a Labour government might set up a new pricing policy which would link water rates to profits. It would mean that if profits rose beyond a certain level, prices would automatically be cut.

Utilities would still be able to keep a share of the excess profits, so there would be still be an incentive to work for greater efficiency. Part of the money should be used for investment, while the rest should be shared between shareholders and consumers.

Mr Dobson said: "The privatisation of the water industry has been a bad deal for customers, taxpayers and the environment. But water privatisation has been good for profits, and it has been better still for water company bosses."

A spokeswoman for the Office of Water Services, Ofwat, said there was adequate provision under the existing system to ensure that profits were not excessively large.

"A lot of companies have already shared profits with customers in the form of rebates. If they have made efficiency savings, we would encourage companies to do that at the earliest possible opportunity. Otherwise they will be shared with customers at the next price review," she said.

Today the Liberal Democrat leader Paddy Ashdown will set out his party's plans for customers to be given voting rights in the water companies. He believes that such privately owned monopolies give consumers little power to affect the way they are run, and that this needs to change.

Mr Ashdown will tell the National Consumers' Council as there is little competition between the water companies and no choice for their customers, there should be new controls on them.

Comment, page 17.

News
Patrick Stewart in the classiest ice bucket to date
people
News
The current recommendation from Britain's Chief Medical Officer, is that people refrain from drinking on at least two days a week
food + drinkTheory is that hangovers are caused by methanol poisoning
News
Australian rapper Iggy Azalea was left red faced but, thankfully, unhurt after taking a few too many steps backwards, sending her tumbling off the stage.
peopleIggy Azalea was left red faced but apparently unhurt after taking a few too many steps backwards
News
newsComedian Lee Hurst started trend with first tweet using the hashtag
PROMOTED VIDEO
Arts and Entertainment
arts + entsWe have created an infogaphic that looks back over the previous incarnations of the Doctor
Sport
Romelu Lukaku scores during Everton's 3-0 win over Arsenal last season
LIVEFollow all the action as Everton take on Arsenal in the final Premier League game of the day
Life and Style
A nearly completed RoboThespian robot inside the Engineered Arts workshop is tested in Penryn, England. The Cornish company, operating from an industrial unit near Falmouth, is the world's only maker of commercially available life sized humanoid robots
techSuper-intelligent robots could decide destroying the human race is the kindest thing to do
News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
News
newsRyan Crighton goes in search of the capo dei capi
Life and Style
techConcept would see planes coated in layer of micro-sensors and able to sense wear and tear
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Software Developer (Java /C# Programmer)- London

£30000 - £45000 per annum: Harrington Starr: A global investment management fi...

Senior Network Engineer-(CCIE, CCNP, Cisco, London)

£65000 - £75000 per annum: Harrington Starr: Senior Network Engineer-(CCIE, CC...

Senior Network Analyst - (CCIE, Cisco, CISSP)

£70000 - £80000 per annum: Harrington Starr: Senior Network Analyst - (CCIE, C...

Senior Network Engineer-(Design, Implementation, CCIE)

£60000 - £80000 per annum: Harrington Starr: Senior Network Engineer-(Design, ...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
What happens to African migrants once they land in Italy during the summer?

What happens to migrants once they land in Italy?

Memphis Barker follows their trail through southern Europe
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

Frank Mugisha: 'Coming out was a gradual process '

Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

Florence Knight's perfect picnic

Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

Horst P Horst comes to the V&A

The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

Mark Hix's summery soups

Soup isn’t just about comforting broths and steaming hot bowls...
Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

Tim Sherwood column

I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition