Andy Burnham has attacked water companies for treating customers like a “bottomless source of funding for other people’s failures” as firms announced plans to hike bills for millions.
The prime minister said he was “angry” at the proposal to hike tariffs, which come at a time when 26 million people were under hosepipe bans due to a near-nationwide drought.
Troubled Thames Water is among five water companies that have received provisional approval from the regulator Ofwat to raise household bills under plans to allow suppliers spend an additional £3.4bn on upgrades. It comes after Ofwat already allowed firms to increase bills by 36 per cent between 2025 and 2030.
Mr Burnham hit out at the plans, saying “customers cannot be treated as a blank cheque”, while campaign groups said most households were already pushed to “breaking point” by soaring bills.
The PM said: “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 added: “Customers cannot be treated as a blank cheque. Where water companies seek to pass unnecessary costs onto households, they will be challenged.
“Our water industry has clearly not been working for people for far too long. That’s why this government will be looking at how we can give the public more control and help keep bills as low as possible.”
Simon Francis, from the End Fuel Poverty Coalition, also criticised the move, saying it would leave low-income families with “impossible choices”.
He said: “The households facing higher water bills are also the same households already pushed to breaking point by years of high energy costs and watching in horror as utilities firms continue to post big profits. When the price of every essential keeps climbing, low income families are left with impossible choices.
He called for ministers to come up with a “joined up plan” to protect the people most exposed to rising costs, adding: “The government cannot keep leaving struggling households to absorb rise after rise. The priority has to be affordable bills, warm homes and an end to the cycle of price shocks that hits the poorest hardest.”
The extra funding for water firms, to be deployed by 2030, is intended to modernise infrastructure to cope with new housing developments and data centres, as well as target forever chemicals to safeguard drinking water supplies.
A spokesman for Water UK, which represents suppliers, said this summer’s drought had shown exactly why new investment is so vital. But the decision will stoke further anger from customers, with the water sector repeatedly under fire over rising bills at a time of poor performance for sewage spills, leaks, water quality and supply failures – and now hosepipe bans.
Steve Hobbs, senior policy lead at the Consumer Council for Water (CCW), which represents customers, said people wanted investment that delivers cleaner rivers, more reliable water supplies and infrastructure fit for the future – but that must be balanced against the fact many are already really struggling with higher bills.
He said Ofwat must show that every pound of the extra £3.4bn is necessary, delivers value for money and is not funding work the companies should have already have paid for. “Trust in water companies has never been lower and customers need to see their money is being well spent,” he said.
Ofwat has already allowed water firms to put up bills by 36 per cent between 2025 and 2030, with eye-watering increases seen in 2025 and another 5.4 per cent on average from April this year.
It sees additional bill increases allowed for Thames Water – Britain’s biggest water supplier with around 16 million customers – which is on the brink of collapse as it sinks under a more than £20 billion debt mountain with creditors looking to secure a rescue deal to stave off temporary nationalisation by the government.
South East Water, which is also set to increase bills for the investment programme, is another in the line of fire after a series of supply interruptions that has left thousands of households, businesses and schools without water.
Helen Campbell, executive director for delivery at Ofwat, insisted it would track performance to ensure water companies are delivering improvements and warned “if they don’t, expenditure can be clawed back”.
The news comes as Thames Water faces fresh scrutiny after revelations that it paid £1m to a chief financial officer appointed a year ago.
The beleaguered firm is struggling under almost £20bn in debt, with cash running out to see the firm through beyond the end of this year and widespread concern about which direction is best for the future of the business.