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Londoners face rises in their water bills of 17 per cent over the next five years.
The increase comes as Thames Water today reveals profits surging to £605 million — the highest by a British water supplier.
Householders could also see fuel costs rising by up to 40 per cent a year for a decade, raising the prospect of £5,000 a year energy bills, warns price comparison website uSwitch.com.
Thames Water, which has already put up bills by a third in the past five years, said average annual household water bills in London are to rise from £283 to £331 between next year and 2015. Thames Water says it needs to charge more to pay for its huge programme of replacing worn-out Victorian mains.
Chief executive David Owens said: “Decades of under-investment have kept our bills artificially low. Unfortunately this is unsustainable. They must rise so we can fund vital upgrades to our crumbling Victorian assets.”
The company plans to spend £5.5 billion constructing two “super-sewers” to remove 32 million tonnes of raw waste from the Thames each year.
The London Tideway Tunnel project aims to realise Mayor Boris Johnson's vision of “a river clean enough to swim in”. The tunnel is the biggest project of its kind since privatisation of the water industry 20 years ago. Mr Owens said the credit crunch had hit Thames Water, with borrowing more expensive and more customers failing to pay bills. He said: “We, like our customers, face a challenging year ahead.
“We are determined to keep bills as low as possible, staying well below the industry average, at less than £1 a day, until 2015. To deliver our extensive programme of investment, we are set up by our regulator Ofwat, to make large profits. For every £1 made in profit, we have invested £2.26 back into the company.”
Londoners will be hit hardest next year by increases of 10.5 per cent, according to the company's five-year business plan. Smaller price rises would follow. Ofwat will make its final decision on the business plan in November. In 2004/2005, the annual household bill was £208.
Reader views (39)
All the privatised utilities should have been put back in public ownership by new Labour but they didn't and now they are going to pay the price at the next election. How much more of this capitalist rip off are we expected to endure.
T H Leeds
- Thomas Hayes, Leeds UK
All Life requires water
Ge, Kernow Nation of
Let's form the RSPCH. People wonder why we no longer save money; this country is too expensive to just exist in. Thames Water is a very poorly run company the amount of waste is absolutely scandalous. If it is true that they want to disconnect people who can not pay these exorbitant prices then nationalise and let the other thieves run it, all ways we get fleeced
- Gary, brentwood
What an evil company, they want the power to cut off people who do not pay these stupid prices for what?
Water. Privatise this joke now. All Life requires water, they the invested it, the stuff falls free from the sky.
We should just be charge for waste
- Ge, Kernow Nation of
this company and any other taking any countrys natural resources which trully belong to the people should be divided into 100000 different comps.and serve the users,with a tiny profit only and be thankful they were chosen to run the contract in the first place!
- Serafim, london
All utility industry should be in the hands of the public..All profits should be put back into the industry to make it more energy and environmentally friendly...All coal power stations must have scrubbers fitted to reduce the polution they spew out...All sewage and waste water must be reprocessed to drinking water quality...
- Bryan Powell, Rugeley
Why can we not switch water suppliers, is the gas in the pipe british gas, therefore is the water thames water ?
a rip off for poor old london residents
- Ian, London
water is the gift of god, however thames water appear to believe that it is gifted to them to turn into liquid gold in some alchemic process designed to extract any liquidity from its customers pockets.
- M.O'Brien, london.uk
Liz London,"both Tory and Labour Governments have inflicted private monopolies on us"is that the same Labour that often get criticised on these pages,ie,Marxist,Left Wing,Communists,Socialist, Oh really?
- Colin, Bristol
Good old Privatisation.
- Raymond, Streatham
Just in case you think that the huge rise is for capital investment do not be taken in by the lies.
Thames Water have squandered money in various areas apart from upgrading drains.
It would be intersting to examine all their balance sheets as they regard Londoners as easy game to rip off.
The major business of Thames Water is not water, it's theft.
- Minnie Ovens, London, UK
Perhaps it should be run as a non-profit organisation, after all, we don't really hav a choice.
How can any company justify a 30 percent prise rise, if they have to invest in their infrastructure so be it, every company has to. IF they did not have a monopoly then no-one would buy from them.
- Graham, London, UK
Bonjour from France...where I live we have a sort of Nu Labor mayor...a socialist ! We did not consume enough water last year, we were told to save water ! So this year profits being low we are to have a price increase to compensate saving that water !
To bring the price of water down in Ramonville, France one has to waste more ! and the Greens were elected with this Nu labor mayor !
- Edouard, Ramonville, France
When will UK governments learn that private momopoly companies don't work? Both Tory and Labour governemts have inflicted private monoplolies on us that waste money and rip us off. From Thames Water to BAA to Raitrack, the story is always the same.
- Liz, London
I have no money left what do I do ?????
- Grim Reaper, Hell
This is not the fault of New Labour. It is the result of the Tory privatisation of the public utilities. New Labour should have returned them to public ownership but didn't so. How many of the expenses have be en spent on shares in these companies by our "Honest" MPs.
T H Leeds
- Thomas Hayes, Leeds UK
£605 million pound profits could repair quite a bit of Thames Waters "crumbling Victorian assets". What a bunch of crooks and thieves.
Okay lad heads back in troughs along with bankers, MPs, rail companies and energy suppliers.
- John David, London
Is the water metered? It seems manifestly unfair to have a set levy given extremes of some customers' usage: many people commute into London and cr@p at work leaving Thames Water to deal with the sewage, then return home to pay their own water bills . . .
- Roz, France
This cannot be a properly run or managed public Company. Limited companies raise capital for investment by reinvesting earned and retained profits, by raising money through share issues or borrowing on the London capital markets. Borrowing may be debenture stock or a straightforward loan secured on company assets or future profits. They do not extract money from today's customers simply to make their own company more profitable and therefore more valuable. When was the last time Ford raised prices on current models so that they could spend that money developing new ones? Or Tesco raising prices so that they can build another superstore that local people do not want?
- Tom Williamson, Croydon, UK
Thomas,
The cost of replacing over a thousand miles of old Victorian water main is very much in excess of £600M profits (or indeed, that multipied over several years). That's why the regulator is allowing price increases to pay for the work.
As for renationalizing the company - who do you think was in charge during the many decades when insufficient investment was made in the infrastructure, leading to the need for an expensive crash programme to replace all the pipes now? Yes, governments, red and blue alike.
- Nigel, London
"and feel a water meter would be of benefit".
Yes, until TW realise that their profits are falling because people use less water and then they bump up their prices to make up for the lost profits.
- John Smith, Londonistan, EUSSR
How much of these extra charges are going on Thames Water's ridiculous new desalination plant, approved by Boris Johnson?
- Helen, West London
It is sad to see that there is no government intervention and that this water bill situation just becomes another fake Nu Labor taxation on Londoners...
- Steveo, London NW1
This should have been factored in, not another hike to the consumer. A consumer is someone that consumes a product, not someone to conned by cartels and monopolies! Competitive tender it, fine against works not done to the price of the works to be done from the profits, compulsory purchase Thames Water and use the fine money to do the works! Few other countries even allow foreign investment in their utility and transport infrastructure, why on Earth is the UK rolling over and saying OK put a gun to our heads?
- Ian, London
agreed with the other comments, it doesnt make any sense. They want all the advantages of operating in both the public and private sector. They need to update london's crumbling system. THEY KNEW THIS when they took on the business and so should have made allowances. It is unacceptable to just expect us to pay for it all. They will have vastly increased profits from the upgrade and yet clearly the bills wont fall. Why should we be expected to top up their profits.
- Michael James, SW1
I've got an idea. Why don't they tell their executives to take pay cuts, and put the money saved towards the repairs instead?
I'm already drained financially by Thames Water each year, and paying over the odds for my water. I'm a solo occupant, and feel a water meter would be of benefit. But I was told, it wouldn't be cost effective to have one installed. Not "Cost effective" to whom exactly?! I think we all know the answer.
- Jock, London
Every year, whether it be utlities such as Thames Water or public transport companies such as South Worst Trains, swingeing charge increases are justified on the basis of a need to "improve services"
Yet twelve months on and with no demonstrable improvement in services, the companies do the same again and all this whilst profiteering from monopoly positions and paying shareholders excessive dividends.
If a company cannot meet its financial obligations re. infrastructure or redevelopement, it should as the earlier poster suggests, seek to do so either via existing capital, or raising new capital via existing shareholders or borrowings.
To simply raise customer charges is more about maintaining the ability to continue to pay shareholders dividends, and this is where the regulator should be clamping down on them
- John, Twickenham
Cleaning the Thames up will be a great benefit to us all. Anyone who uses the Thames knows the risks of waterborne diseases here which will only get worse with global warming.
- Mark, London
Oooh look Clifton Gardens, how very nouveau.
well its simple isnt it. Lets just all invest every penny we have in Thames Water(Macquarie Group). Our bills will then be refunded via bumper dividend payments and you also gain a say in how the company is run. They have a total monopoly so the only threat is govt fines. With a nice healthy £605 million profit in the middle of a recession i can see that doubling over the next few years. buy buy buy people.
- Sebastian Jameson-Hodge-Findley-Smytherson-Wencersersnapperson, W11
I'm surprised it is not 50%, given the way they operate.
At the moment they are digging up behind my house and looking at their 3-man crew you can always spot at least one man on his mobile, one looking on and one doing some work. Then they disappears from hours on end.
If Thames Water need money for their business they ought to borrow it like any other business and not force their customers to hand it over to them for free.
What next? A stealth tax to help Ford design their new Fiesta?
- John Smith, Londonistan, EUSSR
why cant they replace their Victorian worn out mains out of the profits they are announcing. It is high time the Government took these rip off utilities back in to public ownership. Water companies get their supplies for nothing.
T H Leeds
- Thomas Hayes, Leeds UK
I dread retiring because I simply won't be able to exist. All I need is about £50,000 and I could emigrate. Maybe I should try to become an MP!
- Sue, Orpington, Kent
They have seen how easy British gas and all the rest of the providers can get away with charging whatever they want, while this corrupt Westminster lot turns a blind eye, who can blame them. It’s no use saying the government has no control over these companies; they sold them off just to make sure they didn’t take the blame when their mates in the boardroom started talking big profiteering. It’s just one massive scam which they keep playing over and over again. Nothing will change while the Westminster cronies are in power.
- Stephend, London, England
Ridiculous! Who was it that was underinvesting for all this time???? Where did all those profits go and why isn't a larger share of that 605 million profit being reinvested into infrastructure. We do have a government regulator, don't we????
- Mark, London
This is totally disgraceful,we are all suffering in the current recession,how much more can londoners take of this corporate greed? Privatisation=huge pofits for a few at the top and extortion for the rest
- Louisa, london sw4
surely when this is ALL done we can all look forward to a huge reduction in our bills as our new water pipes make everything more efficient and wonderful.
yeah right. oh look, a flying pig
- Katie Price, Sussex (& Ibiza)
So will we be introducing 'water benefit' for our friends the immigrants?
- Jc, London
It's a good job we have a government that will step in and stop this blatant profiteering, Oh, wait a minute...
- Steve, london
Why is their no competitor to this Australian owned company (Macquarie bank)? Where is our government not doing anything - probably too busy swindling their expenses...
- Georgie, Islington, London
Soon the only ones that will be able to afford to live here will be the have nots on handouts.
- Steve, London
