Backlash as water firms say they should be able to hike prices during droughts

Backlash as water firms say they should be able to hike prices during droughts Water regulator Ofwat is weighing up proposals to introduce 'surge pricing' - meaning water scarcity can be taken into account when setting prices during dry summers Water firms are pushing to be allowed to charge more during droughts amid growing anger about rising bills and shortages. Regulator Ofwat is considering 'surge pricing' - which would see the cost of water usage rise in the summer. Sector bosses say it would encourage Brits to save water - but critics warn it is punishing customers for years of failure. It comes just days after Andy Burnham warned water firms not to treat the public as "blank cheques". Under proposals being looked at by Ofwat, suppliers would be allowed to make water scarcity a factor in setting bills. An exceptionally dry summer has resulted in nearly 30 million people living with hosepipe bans, while wildfires tear through parts of the country. The government has not set out a position on surge pricing, but indicated it would not support anything that saw bills go up any further. Water campaigner and former Undertones singer Feargal Sharkey said the measure would simply reward companies for failure. He said: “For 40 years, these companies have had legal obligations to help consumers to reduce their demand and they have failed at that comprehensively, just as they’ve failed to keep our rivers clean and failed to deal with our sewage. Now they’re going to penalise consumers for that failure.” If given the go-ahead, water companies would be allowed to raise prices during droughts from next April. Other measures under consideration include making people pay a higher rate once their water use passes a certain threshold. Ofwat last week gave a provisional go-ahead for firms to hike bills to fund an extra £3.4billion in spending to improve infrastructure. It has already allowed companies to increase prices by 36% between 2025 and 2030. This comes despite mounting anger at raw sewage being dumped into rivers and seas and massive bonuses being lavished on executives. Debt-laden Thames Water is one of the firms provisionally allowed to increase customer bills between 2027 and 2030, alongside Severn Trent Water, Southern Water, Wessex Water and South East Water. Mr Burnham responded last week: "I understand why people are angry - I am too. The truth is customers have been asked to pay more for years, yet serious pollution incidents are at record levels and the pipes are still leaking. "None of which is the billpayer's fault, who should not be treated as a bottomless source of funding for other people's failures." He said the water industry has been failing for "far too long" and said ministers are looking at ways to give the public more control and bring down bills. A petition on the Parliamentary website calling for a referendum on nationalising water companies has attracted over 172,000 signatures. Supporters of surge pricing argue it would incentivise saving water. The Department for Environment Food and Rural Affairs (DEFRA) said any measures brought in must bring bills down. A spokesman said: "We have already ring-fenced money earmarked for new infrastructure so it can only be spent on fixing the problems, and will go further by fundamentally reforming the water sector so that it works for the public, keeping bills as low as they can be. “Water companies are trialling new charging structures which must, as promised, make bills fairer and more affordable while encouraging greater water efficiency.” In a statement Water UK - which represents firms in the sector - said: "To tackle drought water companies are upping their game on leakage, which has decreased to its lowest level on record. But we also need to consider whether we could help people save water by rewarding people through their water bill. This might include eliminating standing charges or expanding discounts for customers who save water. Government can also help new reservoirs be built faster by cutting the time needed for planning." An Ofwat spokesperson said: "The efficient use of water is the is in the best interests of everyone, including businesses. "The options we are progressing would support greater consideration of water scarcity and efficiency by water companies when setting their charges, and encourage more tariff innovation. "We recently carried out a period of consultation on the proposals and will reach a final decision in the near future." Last month analysis by Greenpeace found that water companies are wasting an enormous 2.87 billion litres of water every day through leaks. This is enough to fill 1,150 Olympic-sized swimming pools. A nationwide hosepipe ban saves around 577 million litres per day, the charity estimates.