Thames Water bills will rise by more than a third to an average of £588 over the next five years despite its dismal record on pollution and leaks.Water regulator Ofwat said the UK’s biggest water supplier will be allowed to hike it bills by £152, or 35%, by 2030 from £436 currently. The figures, equivalent to increase of just over £30 a year, are before inflation and the rise in cash terms will be considerably higher.
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00:00Thank you for having me on the programme. Bills will rise by £31 a year on average
00:04over the next five years to fund record levels of investment, £104 billion, which is the
00:10biggest five-year investment programme in water and wastewater since privatisation.
00:16That is needed to safeguard the health of our rivers, our seas and our waterways, to
00:21improve the resilience of our water supplies, and you've reported from Southern Water about
00:25the importance of that this morning, and to get companies to really raise their game
00:30on their day-to-day performance in areas that matter to customers and the environment.
00:35Bills will rise to fund that investment and I know that is a concern for many customers.
00:41Part of my job involves engaging directly with customers and their representatives and
00:45I've heard those concerns first-hand and I understand them, and that's why today we're
00:50also announcing record levels of support for customers.
00:55I mean, while we look at those pictures of people not getting water, I mean, can you
00:59square up those things?
01:02Before I do that, let me just touch on the Southern Water incident. We are aware of the
01:07incident. It is Southern Water's responsibility to engage with and support its customers.
01:13It's clearly a serious incident. The response to the incident is being co-ordinated by the
01:17government, by DEFRA. As the economic regulator, we have no direct role in the response, but
01:23when the response is resolved, Southern Water will be submitting a report to us and we will
01:28see what action, if any, is needed then.
01:32It is right that Southern Water's bill is going up by 53%. The average of £31 a year
01:39varies from company to company and it is driven by investment needs. Southern's investment
01:45needs are different to other companies' investment needs. That's the primary driver of the increase
01:51in Southern Water's bills.
01:53Can you understand why people who are in Southampton, we'll move on to other places
01:57in just a moment, who are not getting any water this morning at all, might be pretty
02:02angry to hear that their charges are going up by more than 50%?
02:08I absolutely understand that anger. Part of my job is to engage with customers directly
02:12and their representatives and I've had the concerns and that anger expressed to me. That's
02:18why in the record investment that we're announcing today, we're also including more support
02:23for customers than ever before. We have scrutinised companies' business proposals, including
02:29Southern Water's, to ensure that customers don't pay a penny more than they need to for
02:33this vital investment. We're also including controls in our decisions today that ring
02:39fence customers' money for investment, so it can't leak out into unwarranted dividend
02:45payments or unwarranted executive bonuses and it will automatically be clawed back if
02:51that investment is not delivered and the benefits aren't realised.
02:55What guarantees are there that if people, and they're going to have to aren't they,
02:59pay 50% more in the case of Southern Water, what guarantees are there that at the end
03:05of that five year period, hopefully at the end of one year, it will actually be better?
03:11If it's not, what happens then?
03:14We've introduced controls to guarantee that customers' money will be ring fenced for investment.
03:20It won't be used for other things. If that investment isn't delivered, it will be clawed
03:24back and returned to customers.