Water bill cuts `not big enough'

CONSUMER GROUPS yesterday called on the water regulator, Ofwat, to cut charges even further after if confirmed plans to reduce domestic bills by an average of 14 per cent next year, a saving of pounds 34 for every household.

The National Consumer Council said that the one-off price cut unveiled by Ian Byatt, the director-general of water services, had let the industry off lightly and said there might be scope for more reductions after 2000. "The water companies have made huge profits since privatisation and their shareholders have made a killing at the consumer's expense. We will be looking very closely at the figures to see if further reductions are possible."

The Consumers' Association said the new price curbs were "long overdue" but said an additional mechanism was necessary to cut bills further should the water companies find extra ways of becoming more efficient.

The price cuts will range from pounds 24 for customers of Thames Water, to pounds 62 for those supplied by Northumbrian Water. In the four years after 2000, all water companies will have to keep charges at or below next year's levels. The price curbs were unveiled alongside a pounds 15bn investment programme for the industry over the next five years, including pounds 7bn to be spent on environmental improvements.

Water UK, said it was concerned that the price cuts could affect the ability of companies to deliver on the environmental programme and put back vital maintenance work on storm drains and sewers.

But the Environment Agency dismissed the industry's concerns. "That argument just won't wash," said its chairman, Lord De Ramsey.

Business, page 17