Consumer body attacks plans for dearer water

OFWAT National Customer Council, the consumer body, yesterday launched a broadside against huge jumps in water prices forecast by most of Britain's water and sewage utilities from 1995.

The move follows recent warnings that water bills would need to rise by an average 6 per cent above inflation each year between 1995 and 2000 to pay for further environmental improvements expected by customers.

Water prices have soared well above the inflation rate in the past three years to finance a pounds 20bn capital investment to improve water quality and meet EC regulations.

But ONCC, set up this year to represent water consumers nationally, pledged to put pressure on Ofwat, the industry regulator, and the Government to keep prices down. It said the public was not prepared to pay for even tighter EC standards that were 'driving up bills faster than customers were willing to pay'.

Jim Gardner, chairman of ONCC, said: 'This could mean bills as high as pounds 450 a year in some parts of the country.' At present water bills are less than half that amount.

The proposed increases have been set out in market plans prepared by the companies after consumer research ordered by Ofwat last autumn. The plans will form a key part of the five-year review by Ofwat next year to fix price rises for the second half of this decade.

'For the first time since privatisation, customers have had a chance to have their say about the service they want and the prices they are prepared to pay,' Mr Gardner said. 'The results give a strong message to the companies and to government that customers are not prepared to pay even higher bills for slightly better services.'

ONCC also has reservations about the way in which some of the companies have carried out the consultation.

'Although companies acknowledge customers' general concern over bills, they have often not presented customers with a least-cost option,' Mr Gardner said. 'Some market plans also ignored business customers altogether.'

It was also concerned that there had been a limited response from many customers already facing difficulties paying their bills. 'It is the role of the ONCC to make sure their voice is heard.'