Water supplier United Utilities has vowed to keep bills low as it scaled back plans to hike prices in a bid 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.
United said it had been repaid £75 million from HMRC from a long-running dispute over corporation tax, and will use £20 million of that to cut about £5 per household from its planned increase to bills.
Another £17 million will be used to help customers struggling to stay afloat, and the remaining £38 million will “be used for future sharing with customers”.
“We are discounting prices next year so that customers do not pay the full allowed price increase, meaning that, on average, bills will go up by no more than inflation,” United’s chief executive officer Steve Mogford said.
The utility, which has seven million customers in north-west England, posted a 9 per cent rise in pre-tax profits to £135.6 million for the six months to October.
The company’s share price increased by 9.5p to 666.5p in early trade.