Water giants tap households for more money as bills soar

Water companies were accused of behaving like 'robber barons' yesterday after demanding swingeing hikes in customer bills. 

Despite the extraordinary pressures on family finances, utilities have proposed average rises of £23, on top of inflation, over the coming five years. 

The biggest hike - £48 - has been proposed by Thames Water. 

Meanwhile, Southern Water, Bristol Water and Sutton & East Surrey customers face rises of between £42 and £44 from 2009-10 to 2014-15. 

The proposals - set to spark a major battle between the firms and consumer groups - will now be considered by regulator Ofwat, which will decide whether to approve them by November. 

Tory environment spokesman Nick Herbert last night said the water companies were straying into 'dangerous' territory given soaring unemployment and faltering household incomes. 

He said: 'These sustained, above-inflation rises are in danger of taking bills to unacceptable levels, especially in a time of recession. If rising bills combine with anger over reductions in supply during times of water shortage, then customers could begin to feel real resentment. 

'We don't want water companies to be seen as 21st Century robber barons, demanding price rises from consumers who cannot say no - but leaking water and restricting supplies to households in return.' 

But the firms have defended the proposed charges, arguing they are necessary to improve drinking water, maintain pipes and sewers and combat leakage. 

Overall, investment will reach £24billion in the five-year period, compared with £20 billion in the second half of the current decade. 

"We recognise that some price increases may be necessary to enable companies to meet the pressure being put on water companies from growing populations..."

Pamela Taylor, chief executive of industry group Water UK, said: 'Water customers tell us they want dependable services at affordable 

prices. The business plans meet these two priorities by finding a balance between continuing with vital investment and doing everything to hold prices down.' 

But some firms face further controversy as they seek to combine hikes in bills with lower-than- expected investment plans. 

For example, Thames Water has 

shaved £1billion off a £6.5billion draft investment plan for the five-year period put forward last year. At the same time, bills will rise by 3.4 per cent after inflation every year - dwarfing its previous 3 per cent proposal. 

And Northumbrian Water plans to raise prices by 3.4 per cent a year above inflation - more than double a previously-proposed 1.3 per cent increase. 

Meanwhile, it wants to trim its spending proposals from £1.3billion to £1.27billion. 

Welsh Water is demanding the most modest increases, pledging to keep increases in line with inflation. 

Dame Yve Buckland, chair of the Consumer Council for Water, said: 'In the current economic climate, price increases will be unwelcome for most of us. 

'We recognise that some price increases may be necessary to enable companies to meet the pressure being put on water companies from growing populations, climate change and tighter EU and UK standards.  continues here

Millions of consumers 'ripped off by energy companies' as watchdog orders end to overcharging

Power giants are ripping off more than nine million households, according to the energy watchdog.

Some 5.9million customers with prepayment meters are being charged on average £118 a year more to stay warm than those who pay by direct debit.

But the 'big six' power companies could be raking in as much as £113million extra a month, much of it from poorer families and pensioners who are not signed up to the cheapest online deals, the National Housing Federation warned.

The scandal was uncovered by the industry regulator Ofgem yesterday, following an eight-month probe into spiralling charges imposed earlier this year.

It also found that some four million people who are not linked to the gas mains have been overcharged by £55 a year for their electricity.

Despite its findings, Ofgem failed to order an immediate halt in pre-pay meter charges, a decision-that drew condemnation from campaigners.

The regulator has given power suppliers until Christmas to make voluntary changes or face further investigation by the Competition Commission, which could take months.

British firms will have to pay 400 per cent more then French rivals for power

The National Housing Federation, which represents local housing associations, described Ofgem's response as 'deeply disappointing'.

Its chief executive David Orr complained: 'This was Ofgem's big chance to show that it was a regulator with teeth but it has fluffed it.

'Asking fat cat energy companies to do the right thing by the fuel poor is like asking Dracula to look after a blood bank.'

Tory business spokesman Alan Duncan said: 'These are completely unacceptable commercial practices which the Government should have cracked down on months ago.'

Ofgem began investigating British Gas, Eon, Npower, Scottish & Southern Energy, EDF and Scottish Power in February after all six imposed hikes of up to 25 per cent in bills.

It has cleared the firms of operating a cartel, rigging prices or imposing unjustified increases.

However, it found evidence of serious failures to offer millions of customers a fair deal.

Ofgem found the price difference between paying by PPM and direct debit has surged from around £80 to £118 since 2005. The difference between paying quarterly and by direct debit has doubled to £80.

It is also concerned that millions who choose to pay by cash or cheque on a quarterly basis are also being charged more than those on direct debit.

Its chief executive, Alistair Buchanan, said: 'Initial findings from our energy market probe give us grounds to demand that companies end practices that hinder customers, especially the vulnerable, from getting the best deal. continues here