Thames Water has said customer bills must increase by 40% by 2030 to fund infrastructure improvements – sparking anger from politicians and union leaders.
Chris Weston, CEO of Thames Water, told the BBC the hike was necessary after the firm’s investors said they would not give the struggling water giant more money unless bills rise.
The news comes as families are finding ways of saving water amid a cost-of-living crisis and stagnant wages.
What has caused the price rises?
Last year Thames Water, the UK’s biggest water supplier, drew up a turnaround plan which asked for bills to rise over the next five years.
Investors were due to pump in almost £4 billion into the debt-laden business over the next two years but withheld the first payment, reportedly because water regulator Ofwat, which has to rubber stamp any price rises, is not willing to allow substantial bill increases. Thames Water said Ofwat had made its business plan “uninvestible”.
"That is the price customers have to pay for the investment in our infrastructure that's needed," Weston told the BBC.
He added that he wanted to "reassure our customers that it is very much business as usual for Thames Water".
According to Water UK, the average UK water bill is £448 a year, so a 40% hike would raise it to £627 with many wondering do water meters save money?
Renationalisation considered due to large debts
The government has said it is ready to take over Thames Water if the company, which was fined more than £35m by the Environment Agency for pollution incidents between 2017 and 2023, collapses
Mr Weston said the firm was "quite a long way off" from nationalisation and "a lot that has to happen" beforehand. He did, however, admit it was "eventually possible".
"Even if that were to happen, the services will continue to be provided," he said. "There will still be clean drinking water, and we will still deal with all the waste that has to be dealt with."
Gove says ‘the answer is not to hit consumers’
Levelling Up Secretary Michael Gove slammed Thames Water’s announcement, saying he has "zero sympathy" for the leadership of Thames Water.
He stated: "In my own constituency, I have seen how they have behaved in a high-handed and arrogant way towards the consumers who pay their bills.
“So the answer is not to hit the consumers, the answer is for the management team to look to their own approach and ask themselves why they are in this difficult situation, and of course the answer is because of serial mismanagement for which they must carry the can.”
Gary Carter, of the GMB union, said: “Thames Water investors are essentially blackmailing customers and Ofwat.
“Assets and infrastructure are falling apart - instead of putting the money in to fix it, shareholders are refusing to pay a penny unless bills are allowed to rocket.
“Holding bill payers to ransom for costs after years of underinvestment is completely unacceptable.
"Shareholders need to think again and invest in Thames and the 8,000 strong workforce who keep the company afloat.”
