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Business News

South West Water to freeze bills until 2015


South West Water has vowed to freeze prices for the next to two years.

Unlike its peers such as Thames Water, Pennon Group, which owns the utility, said that it would hold tariffs at their current rate until April 2016 and then only push through lower-than-inflation rises until 2020.

The company made the promise alongside its half-year results, where pre-tax profits rose 3.5 per cent to £110.9 million. Shares in the company rose 7.5p to 645.5p as it raised its dividend by 7.2 per cent to 9.39p

Ken Harvey, chairman of Pennon Group, said: “The company continues to deliver robust operational performance and improving standards of customer service, notwithstanding the extreme flooding and then the dry summer experienced during the first half of this year.”

Pennon’s decision will heap further embarrassment on Thames Water, which made an unprecedented demand to hike Londoners’ bills by almost £30 next year, which Ofwat rejected.

The UK’s biggest water company wanted to raise bills, which already stand at an average £354 a year, by 8 per cent next year, claiming it had underestimated the costs of projects such as London’s new super-sewer.

Yesterday, Northern-focused United Utilities said it will not raise prices as much as it is permitted to next year to save customers money.

Industry regulator Ofwat allowed United Utilities to put through a 1.2 per cent real price rise for 2014-15, but it instead said it will use a £75 million tax rebate to cut the bills increase to no more than inflation