After power furore, now focus turns to above-inflation rises in water bills

Government drawing up moves to stop water companies ripping off customers

Deputy Political Editor

Moves to stop water companies ripping off their customers are being drawn up by the Government in an attempt to curb above-inflation rises in bills.

The plan, which forms part of a drive by David Cameron to see "household bills coming down", emerged as Ed Miliband signalled the water firms were also in his sights.

The Labour leader stopped short of calling for a freeze in their charges, although he warned the industry needed to be properly "scrutinised".

The increasing cost of water is set to become a political background following skirmishes over the last month between party leaders over the cost of gas and electricity.

Average bills have leapt by 60 per cent over the last ten years to nearly £390 despite reductions by many major companies on the amount they spend on repairs.

A request by Thames Water for an eight per cent increase in charges was recently rejected by the water regulator Ofwat.

The company argued it needed the extra revenue - equivalent to £29 a year - because of growing numbers of customers defaulting on their bills and to help foot the cost of its new £4bn Thames supersewer.

The Department for Environment, Food and Rural Affairs (Defra) initiative was announced today by Mr Cameron's official spokesman.

He said: "Clearly the Prime Minister wants to see household costs coming down. There will be some progress next week which Defra will be doing on the water industry and water bills."

The Independent understands the department has finalised plans to help the poorest consumers with their bills and to ease the burden on customers who have accumulated large debts to the water companies.

Talks will also continue over the weekend between Downing Street and Defra over how to ease the pressure on average families' budgets from water bills. It is considering ways of boosting competition within the industry in an effort to lower charges to customers.

Ofwat is also expected to be given more power to stop companies overcharging customers.

Separately the Treasury examining plans to force water companies to pay more tax following accusations they are building up large debts which they can then set against tax.

Mr Miliband, who took ministers by surprise in September when he promised an incoming Labour Government would freeze energy prices, raised the political stakes over the issue when he was asked if water firms would be his next target.

He replied: "We should be looking at all markets to make sure they are working properly and that includes the water industry.

"I think the water industry is something that should be scrutinised to make sure it is working properly and make sure it is working properly for the benefit of consumers, because I know concerns have been raised."

Charlie Elphicke, the Tory MP for Dover, who has secured a Commons debate next week on the water industry, accused the last Labour government of imposing a lax regime on companies, enabling them to pile up large profits.

He said: "At the moment prices are raised in line with inflation plus a bit. The right thing to do would be for these excess profits to be used to enable bills to fall in real terms."

A Defra spokesman said: "The Government is working across the board to reduce the cost of living and help hard-working households who are feeling the pinch. We want to ensure customers get a good deal from the water sector and will be setting out our approach next week."

Maria Eagle, the shadow Environment Secretary, said: "David Cameron has never shown any interest in rising water bills and has wasted three years doing absolutely nothing to address the impact on already over-burdened family budgets."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

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 General

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Recruitment Genius: General Factory Operatives

£18000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links