Scots given water bills hope as energy prices keep rising

Published on Wednesday 25 June 2008 10:28

WATER bills in Scotland are likely to rise by less than the rate of inflation over the next six years, a report claimed today.

The Water Industry Commission for Scotland said that trends would keep average bills around 15 lower than those south of the border.

The forecast comes as one piece of good news amid warnings to householders that the cost of fuel could soar by as much as 40 per cent this year.

The bosses of the UK's biggest energy firms yesterday told MPs prices were likely to rise steeply due to rocketing wholesale gas costs.

They told the Commons Business and Enterprise Select Committee the energy companies were facing "a seismic shift in commodity prices".

And old folks' charities Help The Aged and Age Concern have called for a 50 million rebate for pensioners this winter amid fears that 800,000 older households could be dragged into poverty if prices do rise as dramatically as predicted.

Scottish Water announced in March that water prices would rise this year by 3.74 per cent – 0.5 per cent below the Retail Price Index inflation rate.

That puts water bills in Scotland at 310, around 20 lower than the average for England and Wales, and among the lowest in the UK.

And today, the Water Industry Commission for Scotland said the trend was likely to continue.

The commission looked at how Scottish Water had coped amid a climate of rising utility bills over the past year.

It found that costs were 5 million lower than had been expected when charges were set in 2005.

Chairman of the commission Sir Ian Byatt welcomed the way Scottish Water had tried to meet challenges.

He said: "If Scottish Water sustains its current good performance in reducing costs, we expect that household water bills could continue to rise by less than inflation during 2010-14."

Business Stream, Scottish Water's retail arm, has already achieved savings, the report said.

The commission said Tesco had saved 1m more quickly across its Scottish operations because of the service it received.

Gas and electricity prices, in contrast, have already risen significantly and are predicted to increase further.

Consumer watchdog Energywatch estimates the average dual fuel customer is now paying nearly 15 per cent more for gas and electricity after the latest round of price increases earlier this year.

At yesterday's Commons committee, Sam Laidlaw, chief executive of British Gas parent company Centrica, defended his company's 1.2 billion profits and said accusations of "fat cat earnings" were unfair.

He said: "We need to make a return in this business because we need to invest in new sources of gas for the UK."