Higher standards could add pounds 100 to water bills: Industry watchdog says increases will be unacceptable to consumers. Mary Fagan and Nicholas Schoon report

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The Independent Online
WATER BILLS could rise by more than pounds 100 by the end of the decade in parts of the country because of the cost of meeting standards on quality and the environment, according to the industry watchdog, Ofwat.

Ian Byatt, the Director General of Ofwat, said the increases would be unmanageable for many consumers and has called on the Government to renegotiate European Commission directives on water and sewage, which account for much of the expected rise in bills.

Mr Byatt said: 'I do not believe customers will continue to tolerate increases in water charges that are well above the rate of inflation and which lead to water bills increasing as a proportion of household incomes.

'Nor do I feel it is right that national obligations should be imposed unless they have been costed and the Secretaries of State (for the Environment and Wales) have explicitly decided that they are consistent with customer willingness to pay.'

Ofwat's challenge coincides with a warning from the commission that it may take Britain to the European Court for a second time for flouting drinking water quality regulations. Today, the court is expected to find Britain guilty of breaching the bathing waters directive for Blackpool, Southport and Formby beaches.

Ofwat says that in some instances, EC regulations have been set without sufficient costing and are based on politics rather than scientific or health considerations. Its report, published yesterday, shows the average water bill in England and Wales will go up by pounds 54 per household in the five years from 1995 (from a base of pounds 190), and could increase by a further pounds 23 in the following five years. The increase would vary between 2 per cent and 10 per cent above inflation. There could also be additional increases of about pounds 40 per household by 2005 to cover improvements in water pressure, reduction in flooding from sewers and other improvements.

Mr Byatt is particularly concerned about the new EC Urban Waste Water Directive, likely to be a major factor in increasing capital expenditure by the water companies. He feels Britain could at least argue for longer to implement the directive.

Ofwat's report is part of an attempt by Mr Byatt to create a national debate about the cost of quality before he sets new price controls for the water industry, to take effect from 1995.

But the National Rivers Authority has accused Ofwat of misleading the public and distorting the debate.

The rivers authority questions some of Ofwat's figures. Much of the rise in bills over the next few years is needed to reach standards which were set years ago, it says. The quality of Britain's rivers fell in the 1980s.

EC bathing and drinking water directives were agreed in the 1970s, yet Britain will not comply with them until 1997 and 1995 respectively - if targets are hit. Securing the agreement of all the EC states and the commission to alter the directives is likely to take years, by which time Britain would probably complywith them.

Leading article, page 21

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