Thames Water customers face £10 increase to fund poorer billpayers

Business reporter,London(wp/es):

Thames Water customers will be paying an extra £10 a year on their bills to fund discounts for the poorest households.

The company expects as many as 300,000 Londoners will be eligible for hardship discounts on their bills of 25%, 50% or 75% depending on their circumstances.

“We have 10 of the poorest boroughs in the country in our region, alongside a lot of affluence. We have surveyed our customers about this proposal and more than two thirds of them agreed with the idea,” said chief executive Steve Robertson.

About 16,000 households will have their arrears wiped out under the plan. It emerged as part of Thames Water’s five-year investment plan in which it pledged to the regulator to invest  £11.7 billion on improving infrastructure, £2 billion more than in its previous five-year plan.

Robertson, who took over as chief executive last year, said this was possible because its new shareholder base, made up of long-term pension fund investors, had agreed to take far lower dividends than predecessors led by Macquarie. 

The former investors controversially took out dividends of more than £670 million between 2010 and 2015.

Under the 2020-2025 investment plan, they will take about £100 million, averaging £20 million a year. The company’s high level of debt, which has also angered critics and customers, will be cut from a gearing ratio of 81.2% to 76.2% as it reduces debt by between £900 million and £1 billion.

In its five-year business plan lodged with Ofwat today, it also pledged to cut leakage by 15% and reduce pollution incidents by 18%.

Thames said it will start preliminary engineering work on the long-mooted new reservoir in Abingdon, Oxfordshire. 

Plans for a reservoir there to collect rainwater from the Cotswolds have been knocked back numerous times over previous decades but Robertson said he hoped this time they would succeed.

He said: “Times are very different now. We have huge population growth, with more than two million extra people coming to live here in the next 15 years.”