Comment: Cash-strapped consumers turn off the taps

2nd Jun 2009 17:19

Results from water companies show just how frugal UK householders are being as they cope with the credit crunch.South West Water, which serves 1.6m people in the West Country, saw revenues climb by 2.5% to £431.7m in the year to March 31, but owner Pennon said customers switching from unmeasured to metered charging hit sales by £9.5m.Dee Valley, which operates in northeast Wales and northwest England, also lifted revenues between the two periods but said the 5.4% increase to just over £20m was less than the average 9.3% rise in charges.It blamed the shortfall on 'the continuing drop in demand by our industrial customers and the switching of household customers from unmeasured to measured charging.'Rather than agreeing to pay a lump sum and turning the taps on whenever they feel like it, consumers want to pay for water as and when they use it and are seemingly using their new discretionary powers to cut back on water use. So how can the water companies cope with such penny-pinching tendencies?Well, they have already submitted business plans for the next five years to Ofwat, the water regulator, and both want to keep lifting our water bills.Dee Valley wants to raise prices by 9.7% above inflation over the next five years. South West's proposals also involve inflation-busting price rises.These will help lift profits even if they do irritate customers, most of whom are unlikely to go through the hassle of switching suppliers, with alternative providers unlikely to offer much better deals.But as water companies have seen already, consumers just need to turn the tap off to stem the flow of unlimited funds into their coffers.So the big water firms will be pinning their hopes on quick end to the economic downturn - and praying that consumers cast off their new-found tight-fistedness.