Memorandum submitted by Mr Roy Roberts[10]
I write to you as a constituent concerned about
the increased charges currently being proposed by South West Water
to the water regulator, OFWAT, for the next five year period (2005-10).
(I should add that I am a member of the consumer body, WaterVoice.)
Under these proposals, South West Water's charges
(already the highest in the country) will increase as follows:
Water—from £121 to £151-£156
(depending on which strategy is approved by OFWAT)—an increase
of between 25% and 29% approx.
Sewerage—from £213 to £256-£266—(again
depending on approved strategy)—an increase of between 16%
and 25% approx.
These substantial increases are over and above
the rate of inflation, ie are at today's prices, so assuming a
rate of inflation of (say) 3% pa in this period, the actual increases
could well be 40-45% for water, and 30-40% for sewerage over this
five year period..
In addition, it's expected that those customers
without water meters (roughly half the customer base) will face
increases that are considerably higher - unmetered customers could
face average total bills of over £600 pa (at today's prices)
at the end of this period, (plus of course the effects of inflation).
This group of customers will include many large families and pensioners,
so these increases will involve considerable financial hardship.
Bills at this level would represent a substantial portion (circa
15%) of the minimum state pension.
You will be aware that the population in this
area includes large numbers of pensioners and many with below-average
incomes, and I am sure others have already been in touch to express
their great concern at this matter.
I understand that this issue of water pricing
is now to be examined by the Select Committee on the Environment,
Food and Rural Affairs. I would suggest that on this issue (which
is generally a non-party matter), the Committee should look at
the particular problems in the South West, and I hope you will
feel able to press the South West members, Colin Breed and Candy
Atherton, to examine carefully the high increases proposed by
South West Water, and the impact on the region's population. I
hope the Committee will look carefully at the extent the water
companies are seeking to make economies and efficiencies in their
operating costs to bring down these increases, and the balance
they are taking between the appropriate level of reward for their
shareholders and mitigating the impact on their customers.
A major factor in the high level of water prices
in the region is the effect of the substantial investment in recent
years in reducing coastal and beach pollution—the cost of
this investment has fallen on a relatively small customer base
in the South West, although of course the cleaner beaches are
enjoyed by many thousands of people from other parts of the country
who have not contributed to the clean-up.
Given that South West Water customers are not
permitted to choose an alternative provider (unlike gas, electricity
and telephone users), I would suggest there is a case for examining
the idea of equalisation of water and sewerage charges across
the country, perhaps by permitting differential price increases
between different regional companies, as recognition of the problems
that have been caused by the level of investment in coastal pollution
measures in the South West.
I would suggest that unless this is done, the
issue of water charges will become an issue that is far more contentious
than the current controversy over council tax increases in Devon,
and will no doubt lead to even more unrest of the kind that is
now evident from pensioners' groups regarding council tax.
The responsible Minister, Elliot Morley, will
shortly be issuing guidance to OFWAT regarding these charging
proposals and the strategy the Government would wish OFWAT to
adopt in increasing the costs. I hope you will feel able to impress
upon him the high degree of hardship in the South West that will
be caused by permitting these increases proposed by South West
Water.
6 October 2003
10 Originally a letter to Angela Browning MP. Back
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