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WATER WATCHDOG WARNS OF COUNCIL TAX-TYPE PROTESTS

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The water industry should prepare for a backlash from customers if, ...
The water industry should prepare for a backlash from customers if,

as widely expected, it announces plans to ratchet up prices to an

unacceptable level over the next five years, WaterVoice said today.

The water companies' final business plans, due to be published from

the end of next week, could reveal that initial figures announced

last autumn (of a£72, or 31% increase in average water bills on top

of inflation between 2005 and 2010) were an under-estimate.

Since then, the government has published its Principal Guidance to

Ofwat which clarifies many of the uncertain costs that most companies

excluded from their draft business plans. For example, the

government has increased the number of rivers and still waters

designated under the Freshwater Fish Directive that according to the

government's own figures could cost water companies - and their

customers -£800m.

Maurice Terry, WaterVoice chairman, said: 'The effects of price

rises, on this scale, would be to worsen the water industry's

mounting debt problems and provoke public resentment against the

water industry, against the environmental lobby and against the

government.

'Many customers are already struggling to pay their bills and with

water prices set to rise significantly over the next five years,

there will be many more people who will find themselves in debt for

the very first time.'

Mr Terry added: 'There is not only a limit to what customers can pay,

but also to what they consider is acceptable to pay. Unless the

companies, regulators and government take quick and effective action,

the outcome of the price review risks causing council tax type

protests.'

WaterVoice has urged customers to get involved in the remainder of

the 2004 price review by airing their views over the next few months

on the water companies' final proposals. WaterVoice committees will

also meet in public in their regions in May and/or July.

Mr Terry said: 'The publication of final business plans represents a

great opportunity for customers to influence debate on the size of

future water bills.

'We encourage water customers to make their voice heard by attending

one of our regional WaterVoice committee meetings, or by writing to,

e-mailing or telephoning their regional WaterVoice office.'

Notes

1. The director general of water services (Ofwat) will set price

limits for the five years 2005-10 later this year. As part of this

process, water companies submitted to Ofwat draft business plans in

August 2003 and final business plans in April 2004. Based on his

analysis of these business plans, the director will issue draft

determinations on 5 August 2004 with final determinations issued on

2 December 2004.

2. Customers will have another opportunity to have their say when

Ofwat publishes its draft determinations of price limits in August.

3. WaterVoice provides a strong and independent voice for all

customers of the water and sewerage companies in England and Wales.

4. WaterVoice operates through nine regionalcommittees in England

and a committee for Wales. They represent the interests of customers

in respect of price, service and value for money; they also

investigate complaints from customers about their water company.

5. The ten WaterVoice committee chairmen form the WaterVoice Council.

The WaterVoice Council and its sub-groups deal with issues at

national and European level.

6.The WaterVoice Annual Report 2002-03 is available hereand the WaterVoice Programme 2003-04 to 2004-05 is available here.

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