Inflation-busting water bill rise

The UK's largest water and wastewater services company, Thames Water, announced it expects to raise bills by around 3%, excluding annual inflation, each year between 2010 and 2015.

United Utilities, which manages water and wastewater distribution in the North West of England, said customers were set to see their average bills increase slightly more than 2% a year during the five-year period, with inflation also stripped out.

Severn Trent, which has more than eight million customers, said its bills would rise "only slightly above inflation".

The Consumer Council for Water warned that Thames Water had proposed an average bill increase of 16% above the rate of inflation by 2015.

David Bland, chairman of the Consumer Council for Water, London and South East, said: "The proposal of high price increases and more water meters, combined with the rising cost of energy bills, could hurt many households. London has some of the country's poorest areas, and the Government needs to seriously consider ways to help those who cannot afford to pay for their water."

All of the UK's water companies are required to submit their draft investment plans for Ofwat's scrutiny, including how much they expect customers to pay.

Thames Water and United Utilities revealed the bill increases as they outlined aims for multi-billion pound investments in water and sewerage services as well as cost-cutting schemes to drive efficiency.

Yorkshire Water said it would deliver a £1.9 billion investment in return for customers paying less than £2 more a year over the next five years.

But households in Wales are set to avoid above-inflation rises after Welsh Water said its customers would not see annual tariffs increase in "real" terms, when inflation is stripped out.