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Water Bills: Cost of Living

Volume 575: debated on Thursday 13 February 2014

7. What steps he is taking to tackle the contribution of rising water bills to the cost of living. (902565)

Last year, the Secretary of State wrote to all water companies to stress the tough times that households are facing. In setting out their 2014-15 prices, several companies have decided not to take the full amount allowed in the 2009 price review. Ofwat estimates that the 2014 price review could reduce pressure on bills by between £120 million and £750 million annually from 2015.

While water bills are soaring, the water companies are making eye-watering profits. They are loading up their balance sheets with debt from tax havens abroad and are paying hardly any tax. Are not the public being ripped off in every possible way by these sharks in the water? Rather than those minor issues, why do not the Government really get a grip on the water companies and get them to serve the customer and the country?

That is a very good question from the Whips, but the answer is that the current price review period mechanism was put in place under the previous Government. As I have already set out, prices will be held at the first opportunity, and some companies are reducing them in what remains of this period. We will see savings in the next price review period compared with the prices forecast had we carried on with the price review left to us by Labour.

Two days ago, Southern Water announced its price rises for 2014-15 at a time when they are tankering in many parts of Romsey and villages throughout the Test valley to ensure that homes are safe from ingress of sewage. Please will the Minister assure me that he will work with Southern Water to ensure that this winter’s expenditure will not negatively impact bills in future?

Ofwat works with companies to consider what is a reasonable amount for them to charge, and it will take into account all the costs that companies face. The key thing is that as we continue to invest in flood defences and deal with some of the problems, the sorts of issues that we face at the moment should have less of an impact on the water companies. I pay tribute to water companies for doing what they are to continue to provide service in these extreme weather conditions. I visited a water treatment plant yesterday to see how it is being defended and it is working well and its staff are working incredibly hard.