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Thames Water criticised for £29 bill rise request

Thames Water Photo: Tim Ockenden/PA Wire

Britain biggest water supplier is asking its 14 million customers to pay an extra £29 on top of what they already pay for bills.

Thames Water will apply to the regulator Ofwat to allow the increase. The company, which recorded profits of £150 million last year, blames the cost of building a super-sewer and unpaid debts.

ITV News Business Editor Laura Kuenssberg reports on the rising cost of water:

The firm claims they have been forced to deal with "unquantifiable" costs that they were not aware of when Ofwat set price limits back in 2009. Increased costs include:

  • Increases in bad debt as a result of the economic downturn
  • Rises in the Environment Agency charges
  • The costs of operating and maintaining the additional 40,000 km of sewers that were transferred to Thames Water by the government in October 2011
  • £400 million to build a giant sewer to accommodate the expanding population of London, called the Thames Tideway Tunnel

Thames Water director Richard Aylard defended the decision:

The Lib Dems deputy leader Simon Hughes has called on Ofwat to reject the company's request:

Thames Water customers should not be expected to pay a huge amount towards the tunnel, given that in the years immediately before making this request, it had assets of billions of pounds which they have paid in dividends to their shareholders.

The UK's biggest water company paid no corporation tax and received £5 million credit from the Treasury during a year in which revenues hit £1.8 billion.

Thames Water made £549 million in underlying pre-tax profits as it raised bills by 6.7%.

Read more: Thames Water has 'clear conscience' on tax affairs

The company's customers have reacted angrily to the news that their water bills are likely to rise.

Ofwat chief executive Regina Finn said: "We know that household incomes are becoming ever more stretched - nobody wants to see any unnecessary increase in bills.

"We will challenge these proposals and question the company strongly on their reasons. Proposed increases will only be allowed if they are fully justified."

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