Water is emerging as the new battle front in the struggle over the cost of living
Three of the UK's biggest water companies are lifting hosepipe bans, imposed to deal with drought, following weeks of heavy rain.
Hosepipe bans in place since April are to be lifted by three of the UK's biggest water companies.
Labour will bring in a new deal for water companies that avoid corporation tax on their profits the new shadow Environment Secretary has said.
Maria Eagle said it should be compulsory for firms to offer lower bills for poorer households in a national affordability scheme and revealed she would be investigating whether Ofwat has enough powers to deal with water firms, in an interview with the Yorkshire Post newspaper.
Ms Eagle claimed water firms were spending too much effort on engineering their finances to avoid paying tax on their profits, and not enough time on helping customers struggling to pay their bills.
"I think we've got to look at having a new deal with the water companies. I will be developing this over the next period of time. It's got to have something to say about tax - you routinely have them avoiding corporation tax on the profits they generate."
Ofwat's decision to reject Thames Waters' bid to increase prices by 8% is final, but Thames Water could appeal to the Competition Commission.
The company said: "We will review the decision carefully before deciding on our next steps."
Water regulator Ofwat has rejected a bid by Thames Water for an additional price hike for 2014 to 2015 of 8%.
– Ofwat's chief regulation officer Sonia Brown
We said we would challenge Thames' application, in the interests of customers. We did just that and on the evidence provided we are not convinced that an extra bill increase is justified.
Water regulator Ofwat has turned down Thames Water's application for an additional price increase for 2014 to 2015.
Ofwat says it was for Thames Water to justify the proposed 8% increase was in customers’ interests.
Within the three month timescale for assessing the application, the water regulator found the evidence the company submitted did not justify its proposed £29 additional increase in customers' bills.
Ofwat’s decision means the maximum that Thames can add to customers’ bills for 2014-15 is still 1.4% above inflation, as set in the 2009 price review.
Ed Miliband has pledged to introduce new social tariffs in the water industry in a bid to drive down living costs.
Speaking in Battersea, Mr Miliband attacked the Government on the issue of the cost of living crisis and vowed to "stand up for markets that work for working people".
Mr Miliband said the water industry should be "scrutinised to make sure it is working properly", during an interview with the Evening Standard last week.
The water industry is the latest sector to be scrutinised by the Labour leader after he promised to freeze gas and electricity bills until 2017 if his party won the next general election.
"Something has gone really wrong" in the UK energy market and Parliament has to "tackle that", the shadow energy secretary told Daybreak.
Labour's Caroline Flint said a 46% drop in the wholesale price which was not passed onto customers when her party were in charge, but warned bills were getting worse under the coalition government.
"Prices are going up three times as fast under this Government than they were under us and we need to tackle that."
Environment Secretary Owen Paterson has told water firms it is "crucial" that water bills are kept affordable for "hardworking people".
– Environment Secretary Owen Paterson
We know that household budgets are under pressure, and keeping water bills affordable is a crucial way we can help hardworking people.
That is why we are pressing hard to make sure customers get a fair deal, by encouraging water companies to look closely at any price increases, introduce social tariffs for vulnerable customers and crack down on bad debt.
Environment Secretary Owen Paterson has called on water companies to "look closely" at whether price increases are necessary and introduce special tariffs for hard-pressed households.
In a letter to suppliers, Mr Paterson said the firms should recognise the financial strain people are under.
The intervention came ahead of an Ofwat ruling expected later this week on an application from Thames Water to increase bills by £29 in 2014-15.
The regulator is expected to reject the application and has questioned the profits being made by firms.
It suggested its next Price Review could ease the upward pressure on bills by up to £750 million after 2015.
– Shadow Environment Secretary Maria Eagle
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