Water Rate Rise Slammed As Unfair And Extortionate For Existing Users

6.10.32pm UTC (GMT +0000) Thu 13th Jan 2005

Hampshire MEP and Lib Dem Eastleigh parliamentary candidate Chris Huhne said that the water rate increase by Southern Water that has now been approved by the official regulator was unfair and extortionate for existing users.

"Such a big increase - 25 per cent over and above inflation over a five year period and 16 per cent this year alone - will hit those on low incomes particularly hard and is demonstrably unfair" said Mr Huhne.

Although Mr Huhne welcomed the improvements that had been promised - for example, rebuilding the Chestnut Avenue sewer in Eastleigh that has burst several times in recent years - he said that the biggest part of the increase was to pay for new infrastructure for people moving into the south east.

"It was always the intention that developers should pay for the cost of water infrastructure out of the windfall gain when planning permission is given on land, but Ofwat have now approved increased water rates worth some £184 million to pay for new infrastructure. Why should existing users pay for new facilities?" said Mr Huhne.

Moreover, the water bill is still (for 80% of households) based on rateable values. This is even though ministers including Michael Howard, the Conservative leader who was then water minister, promised at the time of privatisation that: "The use of rateable values as a basis of water charges will not be permitted beyond the year 2000".

Mr Huhne said that despite the original water bill stating that developers should pay for the necessary infrastructure, Southern Water has put aside £184 million to provide the infrastructure to service the Governments new "towns" such as the Thames Gateway project while there is just £150 million across the region to reduce sewer flooding that is an increasing problem for existing users in Eastleigh.

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