Thames Water to appeal to competition regulator for even higher bills – business live

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Thames Water: ‘customer bills for next year unaffected’

Thames Water has said customer bills for 2025-26 would be unaffected by its appeal to the Competition and Markets Authority.

Neither will there be any delay to its spending plans for the next year, it claimed.

However, it said that it wants three things from the CMA:

A regulatory settlement that reflects the circumstances of Thames Water’s operating area
Targets that are challenging but achievable
An appropriate balance of risk and return

England is the only country in the world where the water industry is entirely privatised. Thames Water is the biggest of those private companies.

It serves just under a quarter of the UK population across London and the Thames Valley.

A graphic showing the Thames Water customer area, and detailing the allowed bills increases.

Thames Water was granted a 35% bills increase to £588, but it had asked for £667.

Thames Water said that it had asked regulator Ofwat for a bills increase that “recognises its current position and supports its turnaround”. It does not believe that it got it.

Ofwat in December set the level of bills increases allowed over five years from April. That followed a tortuous process of negotiation between each water company in England and Wales. The regulator submitted draft proposals, the companies responded, and then the regulator gave a “final determination” of how far bills could rise.

Thames Water on Friday said:

While there has been progress, after a thorough review, it is clear that there remain significant gaps between the final determination and what it needs to deliver for customers and the environment.

You can see the bills increases allowed by Ofwat for each separate water company in this chart. Southern Water customers will have to lump the biggest increases.

A chart showing the bills increase of different water companies in England and Wales.

Each different water company in England and Wales was granted a different level of bills increase by regulator Ofwat.

Thames Water to ask for bills increase of more than 35% over five years

Good morning, and welcome to our live coverage of business, economics and financial markets.

Thames Water has said it will appeal to the UK’s competition regulator to ask to raise bills even higher than previously granted, a in a move likely to prove controversial with politicians and campaigners.

The water company, which serves 16m customers in London and southeast England, said its board had made a unanimous decision to appeal to the Competition and Markets Authority (CMA).

Water bills in England and Wales will rise by 36% on average over the next five years. England and Wales water regulator Ofwat allowed Thames to raise them by 35%. However, the company had asked for a 59% increase.

Thames Water is on the verge of financial collapse. It is awaiting a court judgment on a £3bn debt deal that will allow existing creditors to add to its debt pile of about £19bn. The judgment could come as soon as today, although it is expected early next week.

Campaigners gather outside the Royal Courts of Justice urging the court to block the Thames Water application for a £3bn bailout, which the campaigners say would cost each household 250 pounds annually. The protesters are also calling for the water company to be put into public ownership. Photograph: Vuk Valcic/ZUMA Press Wire/REX/Shutterstock

The company has said that without the cash it will collapse on 24 March.

In a statement to markets on Friday morning, it said the board had concluded that “the final determination for the regulatory period 2025 to 2030 does not appropriately support the investment and improvement that is required for Thames Water to deliver for its customers, communities and the environment for the next five years.”

The company is also being investigated by the water regulator for England and Wales, Ofwat, after delaying environmental improvement schemes.

The chairman of Thames Water, Adrian Montague said:

We have taken the decision to refer our final determination to the Competition and Markets Authority in the interests of our customers and the environment. We are focused on putting the business on a long-term stable footing so we can succeed in our turnaround, and build and maintain an infrastructure that supports growth and can withstand the effects of climate change.

We put forward a realistic business plan for 2025-2030 that addressed our customers’ and stakeholders’ priorities such as providing safe and resilient water supplies and improving performance. After careful consideration, our analysis shows that our final determination for the next regulatory period will continue to impact our ability to fund the improvements our customers and the environment so rightly want and deserve.

The agenda

10am GMT: Eurozone GDP growth second estimate (fourth quarter; previous: 0.2%; consensus: 0.1%)
1:30pm GMT: US retail sales growth (January; prev.: 0.4% month-on-month; cons.: -0.1%)

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