Government urged to include affordability scheme in Water Bill

Ahead of the second reading of the Water Bill on Monday, Labour has called on the government to take action on lowering bills for consumers.

Speaking at Environment Questions at the House of Commons yesterday, Labour’s shadow environment secretary, Maria Eagle, challenged environment secretary Owen Paterson to amend legislation in the Bill to place a duty on water companies to keep bills down.

Earlier this month Paterson wrote to the chief executives of water companies urging them to convert “unexpectedly high profits” into “tangible benefits for customers”.

However, Eagles said households wanted “action from the secretary of state, not a weak letter”.

She called on the environment secretary to require all water companies sign up to an affordability scheme but Paterson argued the reform would amount to a “universal tax across all water bill payers”, which he would not endorse.

Paterson pointed out that in the last Labour government, between 2005 and 2010, water bills rose by 20 per cent to £389, noting that today’s average annual household water bills are just below that at £388.

Paterson also argued that the last government did not have a robust regulator, claiming that under its current chairman Jonson Cox’s leadership, Ofwat was a “rigorous and robust” watchdog for the water industry.

“It is very clear from his statements and negotiations that he expects water companies to hold or reduce bills while also continuing the enormous investment this privatisation has brought.

“Do not underestimate the £116 billion brought into the industry which will make it efficient and keep bills down,” he said

Paterson also noted Ofwat’s estimates that from 2015, pressure on bills could be reduced by £120 million to £750 million annually.

He said he thought Eagles would be “pleasantly surprised that when the new price review comes through, prices will be held and some may fall.”